Yahoo Finance Does Exact Sciences Corporation’s (NASDAQ:EXAS) CEO Pay Matter?
Kevin Conroy has been the CEO of Exact Sciences Corporation (NASDAQ:EXAS) since 2009. First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for Exact Sciences
How Does Kevin Conroy’s Compensation Compare With Similar Sized Companies?
Our data indicates that Exact Sciences Corporation is worth US$6.9b, and total annual CEO compensation is US$13m. (This is based on the year to 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$633k. We looked at a group of companies with market capitalizations from US$4.0b to US$12b, and the median CEO compensation was US$7.2m.
Thus we can conclude that Kevin Conroy receives more in total compensation than the median of a group of companies in the same market, and of similar size to Exact Sciences Corporation. However, this doesn’t necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at Exact Sciences has changed from year to year.
Is Exact Sciences Corporation Growing?
Exact Sciences Corporation has increased its earnings per share (EPS) by an average of 21% a year, over the last three years In the last year, its revenue is up 87%.
This shows that the company has improved itself over the last few years. Good news for shareholders. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see.
You might want to check this free visual report on analyst forecasts for future earnings.
Has Exact Sciences Corporation Been A Good Investment?
I think that the total shareholder return of 487%, over three years, would leave most Exact Sciences Corporation shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary…
We compared the total CEO remuneration paid by Exact Sciences Corporation, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
However we must not forget that the EPS growth has been very strong over three years. Even better, returns to shareholders have been plentiful, over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. Whatever your view on compensation, you might want to check if insiders are buying or selling Exact Sciences shares (free trial).
Or you could feast your eyes on this interactive graph depicting past earnings, cash flow and revenue.
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.
