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Is Adamis Pharmaceuticals Corporation (NASDAQ:ADMP) Excessively Paying Its CEO?

Sadie Atkinson

Dennis Carlo became the CEO of Adamis Pharmaceuticals Corporation (NASDAQ:ADMP) in 2009. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. 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.

See our latest analysis for Adamis Pharmaceuticals

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How Does Dennis Carlo’s Compensation Compare With Similar Sized Companies?

According to our data, Adamis Pharmaceuticals Corporation has a market capitalization of US$136m, and pays its CEO total annual compensation worth US$2.6m. (This figure is for the year to 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$605k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO compensation was US$300k.

As you can see, Dennis Carlo is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Adamis Pharmaceuticals Corporation is paying too much. 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 Adamis Pharmaceuticals has changed from year to year.

NasdaqCM:ADMP CEO Compensation January 23rd 19
NasdaqCM:ADMP CEO Compensation January 23rd 19

Is Adamis Pharmaceuticals Corporation Growing?

Adamis Pharmaceuticals Corporation has increased its earnings per share (EPS) by an average of 13% a year, over the last three years (using a line of best fit). It achieved revenue growth of 8.4% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s good to see a bit of revenue growth, as this suggests the business is able to grow sustainably.

You might want to check this free visual report on analyst forecasts for future earnings.

Has Adamis Pharmaceuticals Corporation Been A Good Investment?

Since shareholders would have lost about 30% over three years, some Adamis Pharmaceuticals Corporation shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

We compared the total CEO remuneration paid by Adamis Pharmaceuticals Corporation, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. However, the returns to investors are far less impressive, over the same period. Considering the per share profit growth, but keeping in mind the weak returns, we’d need more time to form a view on CEO compensation. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Adamis Pharmaceuticals (free visualization of insider trades).

Or you might prefer gaze upon this detailed graph of past earnings, revenue and cash flow .

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 editorial-team@simplywallst.com.