Justin Gover became the CEO of GW Pharmaceuticals plc (NASDAQ:GWPH) in 1999. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Justin Gover's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that GW Pharmaceuticals plc has a market cap of US$3.7b, and reported total annual CEO compensation of US$566k for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$140k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We looked at a group of companies with market capitalizations from US$2.0b to US$6.4b, and the median CEO total compensation was US$5.1m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. Though positive, it's important we delve into the performance of the actual business.
You can see a visual representation of the CEO compensation at GW Pharmaceuticals, below.
Is GW Pharmaceuticals plc Growing?
On average over the last three years, GW Pharmaceuticals plc has shrunk earnings per share by 25% each year (measured with a line of best fit). It achieved revenue growth of 674% over the last year.
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. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. You might want to check this free visual report on analyst forecasts for future earnings.
Has GW Pharmaceuticals plc Been A Good Investment?
With a three year total loss of 9.4%, GW Pharmaceuticals plc would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
GW Pharmaceuticals plc is currently paying its CEO below what is normal for companies of its size.
It's well worth noting that while Justin Gover is paid less than most company leaders (at similar sized companies), performance has been somewhat uninspiring, and total returns have been lacking. I am not concerned by the CEO compensation, but it would be good to see improved performance before pay increases. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling GW Pharmaceuticals (free visualization of insider trades).
If you want to buy a stock that is better than GW Pharmaceuticals, this free list of high return, low debt companies is a great place to look.
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