Is BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) Overpaying Its CEO?
Jean-Jacques Bienaimé has been the CEO of BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) since 2005. First, this article will compare CEO compensation with compensation at other large companies. Next, we'll consider growth that the business demonstrates. 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 BioMarin Pharmaceutical
How Does Jean-Jacques Bienaimé's Compensation Compare With Similar Sized Companies?
According to our data, BioMarin Pharmaceutical Inc. has a market capitalization of US$13b, and pays its CEO total annual compensation worth US$16m. (This figure is for the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$1.1m. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO total compensation to be US$11m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.
It would therefore appear that BioMarin Pharmaceutical Inc. pays Jean-Jacques Bienaimé more than the median CEO remuneration at large companies, in the same market. However, this fact alone doesn't mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at BioMarin Pharmaceutical has changed over time.
Is BioMarin Pharmaceutical Inc. Growing?
BioMarin Pharmaceutical Inc. has increased its earnings per share (EPS) by an average of 72% a year, over the last three years (using a line of best fit). Its revenue is up 6.6% over 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. Shareholders might be interested in this free visualization of analyst forecasts.
Has BioMarin Pharmaceutical Inc. Been A Good Investment?
Given the total loss of 24% over three years, many shareholders in BioMarin Pharmaceutical Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
We examined the amount BioMarin Pharmaceutical Inc. pays its CEO, and compared it to the amount paid by other large companies. As discussed above, we discovered that the company pays more than the median of that group.
However, the earnings per share growth over three years is certainly impressive. 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. Whatever your view on compensation, you might want to check if insiders are buying or selling BioMarin Pharmaceutical shares (free trial).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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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.
