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Is Arrowhead Pharmaceuticals, Inc.'s (NASDAQ:ARWR) CEO Paid Enough Relative To Peers?

Simply Wall St

Chris Anzalone became the CEO of Arrowhead Pharmaceuticals, Inc. (NASDAQ:ARWR) in 2007. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Arrowhead Pharmaceuticals

How Does Chris Anzalone's Compensation Compare With Similar Sized Companies?

According to our data, Arrowhead Pharmaceuticals, Inc. has a market capitalization of US$2.8b, and paid its CEO total annual compensation worth US$1.6m over the year to September 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$643k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. When we examined a selection of companies with market caps ranging from US$2.0b to US$6.4b, we found the median CEO total compensation was US$5.1m.

This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.

The graphic below shows how CEO compensation at Arrowhead Pharmaceuticals has changed from year to year.

NasdaqGS:ARWR CEO Compensation, September 20th 2019

Is Arrowhead Pharmaceuticals, Inc. Growing?

On average over the last three years, Arrowhead Pharmaceuticals, Inc. has grown earnings per share (EPS) by 70% each year (using a line of best fit). In the last year, its revenue is up 905%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. You might want to check this free visual report on analyst forecasts for future earnings.

Has Arrowhead Pharmaceuticals, Inc. Been A Good Investment?

I think that the total shareholder return of 303%, over three years, would leave most Arrowhead Pharmaceuticals, Inc. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Arrowhead Pharmaceuticals, Inc. is currently paying its CEO below what is normal for companies of its size.

Since the business is growing, many would argue this suggests the pay is modest. The pleasing shareholder returns are the cherry on top; you might even consider that Chris Anzalone deserves a raise! It's not often we see shareholders do so well, and yet the CEO is paid modestly. The cherry on top would be if company insiders are buying shares with their own money. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Arrowhead Pharmaceuticals.

If you want to buy a stock that is better than Arrowhead Pharmaceuticals, this free list of high return, low debt companies is a great place to look.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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. Thank you for reading.