Is Applied DNA Sciences, Inc. (NASDAQ:APDN) Excessively Paying Its CEO?
In 2006 James Hayward was appointed CEO of Applied DNA Sciences, Inc. (NASDAQ:APDN). 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. 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.
Check out our latest analysis for Applied DNA Sciences
How Does James Hayward's Compensation Compare With Similar Sized Companies?
Our data indicates that Applied DNA Sciences, Inc. is worth US$14m, and total annual CEO compensation was reported as US$249k for the year to September 2019. We think total compensation is more important but we note that the CEO salary is lower, at US$233k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$602k.
Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of Applied DNA Sciences. On a sector level, around 34% of total compensation represents salary and 66% is other remuneration. Applied DNA Sciences pays out 93% of aggregate payment in the shape of a salary, which is significantly higher than the industry average.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance. You can see a visual representation of the CEO compensation at Applied DNA Sciences, below.
Is Applied DNA Sciences, Inc. Growing?
Applied DNA Sciences, Inc. has seen earnings per share (EPS) move positively by an average of 26% a year, over the last three years (using a line of best fit). It achieved revenue growth of 24% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. You might want to check this free visual report on analyst forecasts for future earnings.
Has Applied DNA Sciences, Inc. Been A Good Investment?
Given the total loss of 94% over three years, many shareholders in Applied DNA Sciences, Inc. are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary...
It appears that Applied DNA Sciences, Inc. remunerates its CEO below most similar sized companies.
Considering the underlying business is growing earnings, this would suggest the pay is modest. Despite some positives, it is likely that shareholders wanted better returns, given the performance over the last three years. So while we would not say that James Hayward is generously paid, it would be good to see an improvement in business performance before too an increase in pay. When I see fairly low remuneration, combined with earnings per share growth, but without big share price gains, it makes me want to research the potential for future gains. On another note, Applied DNA Sciences has 5 warning signs (and 2 which are concerning) we think you should know about.
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.
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