Is Glaukos Corporation's (NYSE:GKOS) CEO Pay Justified?

Simply Wall St

Thomas Burns became the CEO of Glaukos Corporation (NYSE:GKOS) in 2002. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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.

See our latest analysis for Glaukos

How Does Thomas Burns's Compensation Compare With Similar Sized Companies?

According to our data, Glaukos Corporation has a market capitalization of US$2.7b, and paid its CEO total annual compensation worth US$5.2m over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$625k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. When we examined a selection of companies with market caps ranging from US$2.0b to US$6.4b, we found the median CEO total compensation was US$5.0m.

That means Thomas Burns receives fairly typical remuneration for the CEO of a company that size. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

The graphic below shows how CEO compensation at Glaukos has changed from year to year.

NYSE:GKOS CEO Compensation, February 27th 2020

Is Glaukos Corporation Growing?

On average over the last three years, Glaukos Corporation has shrunk earnings per share by 106% each year (measured with a line of best fit). It achieved revenue growth of 33% over the last year.

Investors should note that, over three years, earnings per share are down. But in contrast the revenue growth is strong, suggesting future potential for earnings growth. These two metric are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Shareholders might be interested in this free visualization of analyst forecasts.

Has Glaukos Corporation Been A Good Investment?

Glaukos Corporation has served shareholders reasonably well, with a total return of 28% 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.

In Summary...

Thomas Burns is paid around the same as most CEOs of similar size companies.

We see room for improved growth, as well as fairly unremarkable returns over the last three years. While there is room for improvement, we haven't seen evidence to suggest the pay is too generous. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Glaukos (free visualization of insider trades).

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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