In 2012 Will Lewis was appointed CEO of Insmed Incorporated (NASDAQ:INSM). 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 - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
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How Does Will Lewis's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Insmed Incorporated has a market cap of US$2.1b, and is paying total annual CEO compensation of US$5.9m. (This number is for the twelve months until December 2018). Notably, that's an increase of 37% over the year before. While we always look at total compensation first, we note that the salary component is less, at US$610k. When we examined a selection of companies with market caps ranging from US$1.0b to US$3.2b, we found the median CEO total compensation was US$4.0m.
As you can see, Will Lewis is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Insmed Incorporated is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see a visual representation of the CEO compensation at Insmed, below.
Is Insmed Incorporated Growing?
On average over the last three years, Insmed Incorporated has shrunk earnings per share by 23% each year (measured with a line of best fit). It achieved revenue growth of 260% over the last year.
As investors, we are a bit wary of companies that have lower earnings per share, over three years. But in contrast the revenue growth is strong, suggesting future potential for earnings growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. It could be important to check this free visual depiction of what analysts expect for the future.
Has Insmed Incorporated Been A Good Investment?
Most shareholders would probably be pleased with Insmed Incorporated for providing a total return of 121% over three years. 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.
We compared total CEO remuneration at Insmed Incorporated 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.
While we generally prefer to see stronger EPS growth, there's no arguing with the strong returns to shareholders, over the last three years. Considering this fine result for investors, we daresay the CEO compensation might be apt. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Insmed.
If you want to buy a stock that is better than Insmed, this free list of high return, low debt companies is a great place to look.
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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.