Is Jounce Therapeutics, Inc.'s (NASDAQ:JNCE) CEO Salary Justified?
In 2014 Rich Murray was appointed CEO of Jounce Therapeutics, Inc. (NASDAQ:JNCE). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. 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.
View our latest analysis for Jounce Therapeutics
How Does Rich Murray's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Jounce Therapeutics, Inc. has a market cap of US$189m, and reported total annual CEO compensation of US$3.7m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$525k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$100m to US$400m. The median total CEO compensation was US$1.1m.
Thus we can conclude that Rich Murray receives more in total compensation than the median of a group of companies in the same market, and of similar size to Jounce Therapeutics, Inc.. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see a visual representation of the CEO compensation at Jounce Therapeutics, below.
Is Jounce Therapeutics, Inc. Growing?
Over the last three years Jounce Therapeutics, Inc. has grown its earnings per share (EPS) by an average of 126% per year (using a line of best fit). It achieved revenue growth of 189% over the last year.
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. Shareholders might be interested in this free visualization of analyst forecasts.
Has Jounce Therapeutics, Inc. Been A Good Investment?
With a three year total loss of 71%, Jounce Therapeutics, Inc. would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary...
We compared total CEO remuneration at Jounce Therapeutics, Inc. with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that 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. Considering the per share profit growth, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. Shareholders may want to check for free if Jounce Therapeutics insiders are buying or selling shares.
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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
