Yahoo Finance Is Dermira Inc’s (NASDAQ:DERM) CEO Paid At A Competitive Rate?
Tom Wiggans has been the CEO of Dermira Inc (NASDAQ:DERM) since 2010. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we’ll look at a snap shot of the business growth. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
See our latest analysis for Dermira
How Does Tom Wiggans’s Compensation Compare With Similar Sized Companies?
Our data indicates that Dermira Inc is worth US$491m, and total annual CEO compensation is US$5.8m. (This number is for the twelve months until 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$525k. We examined companies with market caps from US$200m to US$800m, and discovered that the median CEO compensation of that group was US$1.5m.
Thus we can conclude that Tom Wiggans receives more in total compensation than the median of a group of companies in the same market, and of similar size to Dermira Inc. However, this doesn’t necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at Dermira has changed from year to year.
Is Dermira Inc Growing?
On average over the last three years, Dermira Inc has shrunk earnings per share by 38% each year. In the last year, its revenue is up 61%.
Investors should note that, over three years, earnings per share are down. On the other hand, the strong revenue growth suggests the business is growing. These two metric are moving in different directions, so while it’s hard to be confident judging performance, we think the stock is worth watching.
Shareholders might be interested in this free visualization of analyst forecasts. .
Has Dermira Inc Been A Good Investment?
With a three year total loss of 58%, Dermira Inc would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary…
We compared total CEO remuneration at Dermira Inc with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
Over the last three years, shareholder returns have been downright disappointing, and the underlying business has failed to impress us. Although we’d stop short of calling it inappropriate, we think the CEO compensation is probably more on the generous side of things. Whatever your view on compensation, you might want to check if insiders are buying or selling Dermira shares (free trial).
Or you might prefer this data-rich interactive visualization of historic revenue and earnings.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
