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Is Blueprint Medicines Corporation's (NASDAQ:BPMC) CEO Being Overpaid?

Simply Wall St

Jeff Albers has been the CEO of Blueprint Medicines Corporation (NASDAQ:BPMC) since 2014. 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. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Blueprint Medicines

How Does Jeff Albers's Compensation Compare With Similar Sized Companies?

According to our data, Blueprint Medicines Corporation has a market capitalization of US$4.0b, and paid its CEO total annual compensation worth US$9.7m over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$541k. 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$2.0b to US$6.4b, we found the median CEO total compensation was US$5.1m.

It would therefore appear that Blueprint Medicines Corporation pays Jeff Albers more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. 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 Blueprint Medicines has changed from year to year.

NasdaqGS:BPMC CEO Compensation, December 2nd 2019

Is Blueprint Medicines Corporation Growing?

Over the last three years Blueprint Medicines Corporation has shrunk its earnings per share by an average of 38% per year (measured with a line of best fit). In the last year, its revenue is down 65%.

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 Blueprint Medicines Corporation Been A Good Investment?

I think that the total shareholder return of 169%, over three years, would leave most Blueprint Medicines Corporation shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

We compared total CEO remuneration at Blueprint Medicines Corporation with the amount paid at companies with a similar market capitalization. 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. But clearly there are some positives, because investors have done well over the same time frame. So on this analysis we'd stop short of criticizing the level of CEO compensation. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Blueprint Medicines (free visualization of insider trades).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.

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. Thank you for reading.