Is Pernix Therapeutics Holdings Inc’s (NASDAQ:PTX) CEO Overpaid Relative To Its Peers?

Simply Wall St. - Posted 3 years ago
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John Sedor became the CEO of Pernix Therapeutics Holdings Inc (NASDAQ:PTX) in 2016. 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 – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Pernix Therapeutics Holdings

How Does John Sedor’s Compensation Compare With Similar Sized Companies?

According to our data, Pernix Therapeutics Holdings Inc has a market capitalization of US$7.0m, and pays its CEO total annual compensation worth US$1.2m. (This is based on the year to 2017). While we always look at total compensation first, we note that the salary component is less, at US$610k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO compensation was US$295k.

Thus we can conclude that John Sedor receives more in total compensation than the median of a group of companies in the same market, and of similar size to Pernix Therapeutics Holdings Inc. However, this doesn’t necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see a visual representation of the CEO compensation at Pernix Therapeutics Holdings, below.

NasdaqGM:PTX CEO Compensation November 30th 18

Is Pernix Therapeutics Holdings Inc Growing?

On average over the last three years, Pernix Therapeutics Holdings Inc has grown earnings per share (EPS) by 44% each year. In the last year, its revenue is down -5.0%.

This shows that the company has improved itself over the last few years. Good news for shareholders. The lack of revenue growth isn’t ideal, but it is the bottom line that counts most in business.

We don’t have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Pernix Therapeutics Holdings Inc Been A Good Investment?

Since shareholders would have lost about 98% over three years, some Pernix Therapeutics Holdings Inc shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.

In Summary…

We compared total CEO remuneration at Pernix Therapeutics Holdings 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 we must not forget that the EPS growth has been very strong over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Pernix Therapeutics Holdings (free visualization of insider trades).

Or you could feast your eyes on this interactive graph depicting past earnings, cash flow and revenue.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at [email protected]