Ron Cohen has been the CEO of Acorda Therapeutics, Inc. (NASDAQ:ACOR) since 1995. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Ron Cohen's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Acorda Therapeutics, Inc. has a market cap of US$116m, and reported total annual CEO compensation of US$2.4m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$796k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$509k.
As you can see, Ron Cohen is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Acorda Therapeutics, Inc. is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at Acorda Therapeutics has changed from year to year.
Is Acorda Therapeutics, Inc. Growing?
Acorda Therapeutics, Inc. has reduced its earnings per share by an average of 35% a year, over the last three years (measured with a line of best fit). Its revenue is down 64% over last year.
Unfortunately, earnings per share have trended lower over the last three years. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.
Has Acorda Therapeutics, Inc. Been A Good Investment?
Given the total loss of 88% over three years, many shareholders in Acorda Therapeutics, Inc. are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We examined the amount Acorda Therapeutics, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
Earnings per share have not grown in three years, and the revenue growth fails to impress us. Just as bad, share price gains for investors have failed to materialize, over the same period. Some might well form the view that the CEO is paid too generously! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Acorda Therapeutics.
Important note: Acorda Therapeutics may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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If you spot an error that warrants correction, please contact the editor at [email protected]. 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. Thank you for reading.