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In 2014 John Thero was appointed CEO of Amarin Corporation plc (NASDAQ:AMRN). First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does John Thero's Compensation Compare With Similar Sized Companies?
According to our data, Amarin Corporation plc has a market capitalization of US$6.9b, and paid its CEO total annual compensation worth US$4.2m over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$660k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. When we examined a selection of companies with market caps ranging from US$4.0b to US$12b, we found the median CEO total compensation was US$6.4m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
The graphic below shows how CEO compensation at Amarin has changed from year to year.
Is Amarin Corporation plc Growing?
Over the last three years Amarin Corporation plc has grown its earnings per share (EPS) by an average of 9.5% per year (using a line of best fit). Its revenue is up 77% over last year.
It's great to see that revenue growth is strong. And in that context, the modest EPS improvement certainly isn't shabby. So while I'd stop short of saying growth is absolutely outstanding, there are definitely some clear positives! Shareholders might be interested in this free visualization of analyst forecasts.
Has Amarin Corporation plc Been A Good Investment?
I think that the total shareholder return of 564%, over three years, would leave most Amarin Corporation plc shareholders smiling. 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.
It looks like Amarin Corporation plc pays its CEO less than similar sized companies.
John Thero is paid less than what is normal at similar size companies, and the total shareholder return has been pleasing over the last three years. Although we could see higher growth, we'd argue the remuneration is modest, based on these observations. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Amarin (free visualization of insider trades).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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.
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