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What Did Alkermes' (NASDAQ:ALKS) CEO Take Home Last Year?

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Simply Wall St
·3 min read
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Richard Pops has been the CEO of Alkermes plc (NASDAQ:ALKS) since 2011, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Alkermes.

See our latest analysis for Alkermes

How Does Total Compensation For Richard Pops Compare With Other Companies In The Industry?

Our data indicates that Alkermes plc has a market capitalization of US$2.9b, and total annual CEO compensation was reported as US$15m for the year to December 2019. That's a notable decrease of 14% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.0m.

For comparison, other companies in the same industry with market capitalizations ranging between US$2.0b and US$6.4b had a median total CEO compensation of US$4.3m. Hence, we can conclude that Richard Pops is remunerated higher than the industry median. What's more, Richard Pops holds US$14m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component

2019

2018

Proportion (2019)

Salary

US$1.0m

US$1.0m

7%

Other

US$14m

US$16m

93%

Total Compensation

US$15m

US$17m

100%

On an industry level, roughly 24% of total compensation represents salary and 76% is other remuneration. It's interesting to note that Alkermes allocates a smaller portion of compensation to salary in comparison to the broader 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

Alkermes plc's Growth

Alkermes plc's earnings per share (EPS) grew 7.5% per year over the last three years. Its revenue is up 9.0% over the last year.

We're not particularly impressed by the revenue growth, but the modest improvement in EPS is good. So there are some positives here, but not enough to earn high praise. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Alkermes plc Been A Good Investment?

With a three year total loss of 64% for the shareholders, Alkermes plc would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As we touched on above, Alkermes plc is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Over the last three years, shareholder returns have been downright disappointing for Alkermes, and although EPS growth is steady, it hasn't set the world on fire. This doesn't look good when you see that Richard is earning more than the industry median. All things considered, we believe shareholders would be disappointed to see Richard's compensation grow without first seeing an improvement in the performance of the company.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 1 warning sign for Alkermes that investors should look into moving forward.

Switching gears from Alkermes, 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.