Here's What We Learned About The CEO Pay At Jounce Therapeutics, Inc. (NASDAQ:JNCE)

Rich Murray became the CEO of Jounce Therapeutics, Inc. (NASDAQ:JNCE) in 2014, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

View our latest analysis for Jounce Therapeutics

How Does Total Compensation For Rich Murray Compare With Other Companies In The Industry?

At the time of writing, our data shows that Jounce Therapeutics, Inc. has a market capitalization of US$270m, and reported total annual CEO compensation of US$1.5m for the year to December 2019. Notably, that's a decrease of 60% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$541k.

On examining similar-sized companies in the industry with market capitalizations between US$100m and US$400m, we discovered that the median CEO total compensation of that group was US$1.7m. This suggests that Jounce Therapeutics remunerates its CEO largely in line with the industry average. What's more, Rich Murray holds US$360k worth of shares in the company in their own name.

Talking in terms of the industry, salary represented approximately 23% of total compensation out of all the companies we analyzed, while other remuneration made up 77% of the pie. Jounce Therapeutics pays out 37% of remuneration in the form of a salary, significantly higher than the industry average. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Jounce Therapeutics, Inc.'s Growth Numbers

Jounce Therapeutics, Inc. has seen its earnings per share (EPS) increase by 72% a year over the past three years. It achieved revenue growth of 86% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. 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 Jounce Therapeutics, Inc. Been A Good Investment?

Given the total shareholder loss of 48% over three years, many shareholders in Jounce Therapeutics, Inc. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As we touched on above, Jounce Therapeutics, Inc. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. At the same time, the company has logged negative shareholder returns over the last three years. But EPS growth is moving in a favorable direction, certainly a positive sign. It's tough for us to say CEO compensation is too generous when EPS growth is positive, but negative investor returns will irk shareholders and reduce any chances of a raise.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 3 warning signs for Jounce Therapeutics you should be aware of, and 1 of them is significant.

Switching gears from Jounce Therapeutics, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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