In 2016 Amit Munshi was appointed CEO of Arena Pharmaceuticals Inc (NASDAQ:ARNA). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Amit Munshi’s Compensation Compare With Similar Sized Companies?
According to our data, Arena Pharmaceuticals Inc has a market capitalization of US$2.0b, and pays its CEO total annual compensation worth US$4.4m. (This number is for the twelve months until 2016). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$398k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$3.6m.
So Amit Munshi is paid around the average of the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.
You can see a visual representation of the CEO compensation at Arena Pharmaceuticals, below.
Is Arena Pharmaceuticals Inc Growing?
Arena Pharmaceuticals Inc has increased its earnings per share (EPS) by an average of 31% a year, over the last three years It saw its revenue drop -59% over the last year.
This demonstrates that the company has been improving recently. A good result. Revenue growth is a real positive for growth, but ultimately profits are more important.
Shareholders might be interested in this free visualization of analyst forecasts. .
Has Arena Pharmaceuticals Inc Been A Good Investment?
Most shareholders would probably be pleased with Arena Pharmaceuticals Inc for providing a total return of 134% over three years. So they may not be at all concerned if the CEO is paid more than is normal for companies around the same size.
Remuneration for Amit Munshi is close enough to the median pay for a CEO of a similar sized company .
Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. So you may want to check if insiders are buying Arena Pharmaceuticals shares with their own money (free access).
Or you could feast your eyes on this interactive graph depicting past earnings, cash flow and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.