How Should Investors React To Miragen Therapeutics' (NASDAQ:MGEN) CEO Pay?

Bill Marshall has been the CEO of Miragen Therapeutics, Inc. (NASDAQ:MGEN) since 2017, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Miragen Therapeutics

How Does Total Compensation For Bill Marshall Compare With Other Companies In The Industry?

Our data indicates that Miragen Therapeutics, Inc. has a market capitalization of US$61m, and total annual CEO compensation was reported as US$1.1m for the year to December 2019. Notably, that's a decrease of 46% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$521k.

For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$1.1m. This suggests that Miragen Therapeutics remunerates its CEO largely in line with the industry average. Furthermore, Bill Marshall directly owns US$291k worth of shares in the company.

On an industry level, around 23% of total compensation represents salary and 77% is other remuneration. Miragen Therapeutics pays out 49% 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 Miragen Therapeutics, Inc.'s Growth Numbers

Over the past three years, Miragen Therapeutics, Inc. has seen its earnings per share (EPS) grow by 23% per year. In the last year, its revenue is down 40%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 Miragen Therapeutics, Inc. Been A Good Investment?

Given the total shareholder loss of 88% over three years, many shareholders in Miragen 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, Miragen 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. Overall, we wouldn't say Bill is paid an unjustified compensation, but shareholders might not favor a raise before shareholder returns show a positive trend.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 6 warning signs for Miragen Therapeutics (2 are significant!) that you should be aware of before investing here.

Important note: Miragen Therapeutics 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.