Richard Pops has been the CEO of Alkermes plc (NASDAQ:ALKS) since 2011. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
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How Does Richard Pops's Compensation Compare With Similar Sized Companies?
Our data indicates that Alkermes plc is worth US$3.9b, and total annual CEO compensation is US$17m. (This figure is for the year to December 2018). That's a notable increase of 82% on last year. We think total compensation is more important but we note that the CEO salary is lower, at US$1.0m. We examined companies with market caps from US$2.0b to US$6.4b, and discovered that the median CEO total compensation of that group was US$5.3m.
As you can see, Richard Pops is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Alkermes plc is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see a visual representation of the CEO compensation at Alkermes, below.
Is Alkermes plc Growing?
Over the last three years Alkermes plc has grown its earnings per share (EPS) by an average of 25% per year (using a line of best fit). Its revenue is up 17% over last year.
This demonstrates that the company has been improving recently. A good result. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. 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 43%, Alkermes plc would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
We compared the total CEO remuneration paid by Alkermes plc, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
However, the earnings per share growth over three years is certainly impressive. However, the returns to investors are far less impressive, over the same period. This contrasts with the growth in CEO remuneration, in the last year. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Alkermes.
Important note: Alkermes may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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.