In 2014 Mike Bigham was appointed CEO of Paratek Pharmaceuticals, Inc. (NASDAQ:PRTK). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Mike Bigham's Compensation Compare With Similar Sized Companies?
Our data indicates that Paratek Pharmaceuticals, Inc. is worth US$181m, and total annual CEO compensation is US$3.7m. (This figure is for the year to December 2017). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$460k. We looked at a group of companies with market capitalizations from US$100m to US$400m, and the median CEO total compensation was US$1.0m.
It would therefore appear that Paratek Pharmaceuticals, Inc. pays Mike Bigham more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Paratek Pharmaceuticals has changed over time.
Is Paratek Pharmaceuticals, Inc. Growing?
Paratek Pharmaceuticals, Inc. has increased its earnings per share (EPS) by an average of 18% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 36%.
This shows that the company has improved itself over the last few years. Good news for shareholders. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. It could be important to check this free visual depiction of what analysts expect for the future.
Has Paratek Pharmaceuticals, Inc. Been A Good Investment?
Since shareholders would have lost about 63% over three years, some Paratek Pharmaceuticals, Inc. shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We compared total CEO remuneration at Paratek Pharmaceuticals, Inc. with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
However, the earnings per share growth over three years is certainly impressive. However, the returns to investors are far less impressive, over the same period. While EPS is positive, we'd say shareholders would want better returns before the CEO is paid much more. Whatever your view on compensation, you might want to check if insiders are buying or selling Paratek Pharmaceuticals shares (free trial).
If you want to buy a stock that is better than Paratek Pharmaceuticals, this free list of high return, low debt companies is a great place to look.
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