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Should You Worry About Amyris, Inc.'s (NASDAQ:AMRS) CEO Pay Cheque?

Simply Wall St
·3 min read

John Melo has been the CEO of Amyris, Inc. (NASDAQ:AMRS) since 2007. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. 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 Amyris

How Does John Melo's Compensation Compare With Similar Sized Companies?

Our data indicates that Amyris, Inc. is worth US$365m, and total annual CEO compensation was reported as US$9.6m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$600k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$200m to US$800m. The median total CEO compensation was US$2.3m.

Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Amyris stands. On an industry level, roughly 18% of total compensation represents salary and 82% is other remuneration. Non-salary compensation represents a greater slice of the remuneration pie for Amyris, in sharp contrast to the overall sector.

As you can see, John Melo is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Amyris, Inc. is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance. You can see, below, how CEO compensation at Amyris has changed over time.

NasdaqGS:AMRS CEO Compensation, March 23rd 2020
NasdaqGS:AMRS CEO Compensation, March 23rd 2020

Is Amyris, Inc. Growing?

On average over the last three years, Amyris, Inc. has grown earnings per share (EPS) by 30% each year (using a line of best fit). Its revenue is up 140% over last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Shareholders might be interested in this free visualization of analyst forecasts.

Has Amyris, Inc. Been A Good Investment?

Given the total loss of 69% over three years, many shareholders in Amyris, Inc. are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We compared the total CEO remuneration paid by Amyris, Inc., and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

However we must not forget that the EPS growth has been very strong over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. Considering the per share profit growth, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. Shifting gears from CEO pay for a second, we've spotted 3 warning signs for Amyris you should be aware of, and 2 of them shouldn't be ignored.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.