This article will reflect on the compensation paid to Dan Gold who has served as CEO of MEI Pharma, Inc. (NASDAQ:MEIP) since 2010. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for MEI Pharma.
See our latest analysis for MEI Pharma
Comparing MEI Pharma, Inc.'s CEO Compensation With the industry
According to our data, MEI Pharma, Inc. has a market capitalization of US$299m, and paid its CEO total annual compensation worth US$2.3m over the year to June 2020. We note that's an increase of 22% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$650k.
On comparing similar companies from the same industry with market caps ranging from US$100m to US$400m, we found that the median CEO total compensation was US$1.7m. This suggests that Dan Gold is paid more than the median for the industry. Moreover, Dan Gold also holds US$994k worth of MEI Pharma stock directly under their own name.
Component | 2020 | 2019 | Proportion (2020) |
Salary | US$650k | US$610k | 29% |
Other | US$1.6m | US$1.2m | 71% |
Total Compensation | US$2.3m | US$1.9m | 100% |
Speaking on an industry level, nearly 24% of total compensation represents salary, while the remainder of 76% is other remuneration. According to our research, MEI Pharma has allocated a higher percentage of pay to salary in comparison to the wider industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at MEI Pharma, Inc.'s Growth Numbers
Over the last three years, MEI Pharma, Inc. has shrunk its earnings per share by 4.9% per year. It achieved revenue growth of 487% over the last year.
The decrease in EPS could be a concern for some investors. But on the other hand, revenue growth is strong, suggesting a brighter future. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has MEI Pharma, Inc. Been A Good Investment?
MEI Pharma, Inc. has not done too badly by shareholders, with a total return of 4.3%, over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
To Conclude...
As previously discussed, Dan is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. On the other hand, revenues will undoubtedly inspire confidence since they've been growing at a healthy pace recently. Shareholder returns have also grown during this time, but haven't been as impressive. EPS growth, meanwhile, has been negative. But we don't think the high CEO compensation is a huge problem.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 3 warning signs for MEI Pharma (1 is significant!) that you should be aware of before investing here.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.