Yahoo Finance Does Accuray Incorporated's (NASDAQ:ARAY) CEO Pay Compare Well With Peers?
Joshua Levine has been the CEO of Accuray Incorporated (NASDAQ:ARAY) since 2012. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
See our latest analysis for Accuray
How Does Joshua Levine's Compensation Compare With Similar Sized Companies?
Our data indicates that Accuray Incorporated is worth US$208m, and total annual CEO compensation was reported as US$4.6m for the year to June 2019. We think total compensation is more important but we note that the CEO salary is lower, at US$721k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. When we examined a selection of companies with market caps ranging from US$100m to US$400m, we found the median CEO total compensation was US$1.4m.
Next, let's break down remuneration compositions to understand how the industry and company compare with each other. Talking in terms of the sector, salary represented approximately 23% of total compensation out of all the companies we analysed, while other remuneration made up 77% of the pie. Accuray sets aside a smaller share of compensation for salary, in comparison to the overall industry.
Thus we can conclude that Joshua Levine receives more in total compensation than the median of a group of companies in the same market, and of similar size to Accuray Incorporated. 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. The graphic below shows how CEO compensation at Accuray has changed from year to year.
Is Accuray Incorporated Growing?
On average over the last three years, Accuray Incorporated has seen earnings per share (EPS) move in a favourable direction by 50% each year (using a line of best fit). In the last year, its revenue is down 2.4%.
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. Shareholders might be interested in this free visualization of analyst forecasts.
Has Accuray Incorporated Been A Good Investment?
Given the total loss of 45% over three years, many shareholders in Accuray Incorporated are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
In Summary...
We examined the amount Accuray Incorporated pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
However we must not forget that the EPS growth has been very strong over three years. However, the returns to investors are far less impressive, over the same period. While EPS is moving in the right direction, we'd say shareholders would want better returns before the CEO is paid much more. Shifting gears from CEO pay for a second, we've spotted 5 warning signs for Accuray you should be aware of, and 2 of them are significant.
If you want to buy a stock that is better than Accuray, this free list of high return, low debt companies is a great place to look.
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.
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