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What Did Aerie Pharmaceuticals' (NASDAQ:AERI) CEO Take Home Last Year?

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·3 min read
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Vince Anido became the CEO of Aerie Pharmaceuticals, Inc. (NASDAQ:AERI) in 2013, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Aerie Pharmaceuticals pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Aerie Pharmaceuticals

Comparing Aerie Pharmaceuticals, Inc.'s CEO Compensation With the industry

According to our data, Aerie Pharmaceuticals, Inc. has a market capitalization of US$592m, and paid its CEO total annual compensation worth US$5.5m over the year to December 2019. Notably, that's a decrease of 18% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$773k.

On comparing similar companies from the same industry with market caps ranging from US$200m to US$800m, we found that the median CEO total compensation was US$2.0m. This suggests that Vince Anido is paid more than the median for the industry. Furthermore, Vince Anido directly owns US$2.9m worth of shares in the company, implying that they are deeply invested in the company's success.

Component

2019

2018

Proportion (2019)

Salary

US$773k

US$750k

14%

Other

US$4.8m

US$6.0m

86%

Total Compensation

US$5.5m

US$6.8m

100%

Talking in terms of the industry, salary represented approximately 25% of total compensation out of all the companies we analyzed, while other remuneration made up 75% of the pie. Aerie Pharmaceuticals sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
ceo-compensation

Aerie Pharmaceuticals, Inc.'s Growth

Aerie Pharmaceuticals, Inc. saw earnings per share stay pretty flat over the last three years. In the last year, its revenue is up 39%.

The decrease in EPS could be a concern for some investors. But on the other hand, revenue growth is strong, suggesting a brighter future. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Aerie Pharmaceuticals, Inc. Been A Good Investment?

Since shareholders would have lost about 78% over three years, some Aerie Pharmaceuticals, Inc. investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As previously discussed, Vince is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. It concerns us that EPS growth for the company is negative, while share price gains did not materialize over the last three years. On the bright side, at lease revenue growth seems to be marching northward. Few would argue that it's wise for the company to pay any more, before returns improve.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Aerie Pharmaceuticals that investors should think about before committing capital to this stock.

Switching gears from Aerie Pharmaceuticals, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.