Our View On Coherus BioSciences' (NASDAQ:CHRS) CEO Pay
Denny Lanfear has been the CEO of Coherus BioSciences, Inc. (NASDAQ:CHRS) since 2010, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Coherus BioSciences pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
See our latest analysis for Coherus BioSciences
How Does Total Compensation For Denny Lanfear Compare With Other Companies In The Industry?
Our data indicates that Coherus BioSciences, Inc. has a market capitalization of US$1.3b, and total annual CEO compensation was reported as US$5.4m for the year to December 2019. We note that's an increase of 37% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$751k.
In comparison with other companies in the industry with market capitalizations ranging from US$1.0b to US$3.2b, the reported median CEO total compensation was US$3.9m. Accordingly, our analysis reveals that Coherus BioSciences, Inc. pays Denny Lanfear north of the industry median. What's more, Denny Lanfear holds US$12m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2019 | 2018 | Proportion (2019) |
Salary | US$751k | US$702k | 14% |
Other | US$4.6m | US$3.2m | 86% |
Total Compensation | US$5.4m | US$3.9m | 100% |
Speaking on an industry level, nearly 23% of total compensation represents salary, while the remainder of 77% is other remuneration. Coherus BioSciences pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Coherus BioSciences, Inc.'s Growth
Coherus BioSciences, Inc.'s earnings per share (EPS) grew 83% per year over the last three years. Its revenue is up 300% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. 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 Coherus BioSciences, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Coherus BioSciences, Inc. for providing a total return of 40% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
To Conclude...
As previously discussed, Denny is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, Coherus BioSciences has produced strong EPS growth and shareholder returns over the last three years. Considering such exceptional results for the company, we'd venture to say CEO compensation is fair. And given most shareholders are probably very happy with recent returns, they might even think that Denny deserves a raise!
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 4 warning signs for Coherus BioSciences (1 is concerning!) that you should be aware of before investing here.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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.
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