Does Genocea Biosciences' (NASDAQ:GNCA) CEO Salary Compare Well With Industry Peers?

This article will reflect on the compensation paid to Chip Clark who has served as CEO of Genocea Biosciences, Inc. (NASDAQ:GNCA) since 2011. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Genocea Biosciences.

See our latest analysis for Genocea Biosciences

How Does Total Compensation For Chip Clark Compare With Other Companies In The Industry?

At the time of writing, our data shows that Genocea Biosciences, Inc. has a market capitalization of US$119m, and reported total annual CEO compensation of US$1.1m for the year to December 2019. Notably, that's a decrease of 19% over the year before. In particular, the salary of US$532.6k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$1.1m. This suggests that Genocea Biosciences remunerates its CEO largely in line with the industry average.

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. According to our research, Genocea Biosciences has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Genocea Biosciences, Inc.'s Growth Numbers

Over the past three years, Genocea Biosciences, Inc. has seen its earnings per share (EPS) grow by 87% per year. In the last year, its revenue is up 57%.

Shareholders would be glad to know that the company has improved itself over the last few years. 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 Genocea Biosciences, Inc. Been A Good Investment?

Given the total shareholder loss of 76% over three years, many shareholders in Genocea Biosciences, Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

As we noted earlier, Genocea Biosciences pays its CEO in line with similar-sized companies belonging to the same industry. At the same time, the company has logged negative shareholder returns over the last three years. But on the bright side, EPS growth is positive over the same period. 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.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 5 warning signs (and 3 which are a bit concerning) in Genocea Biosciences we think you should know about.

Important note: Genocea Biosciences is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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