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How Does Amgen's (NASDAQ:AMGN) CEO Salary Compare to Peers?

Simply Wall St
·3 min read

This article will reflect on the compensation paid to Bob Bradway who has served as CEO of Amgen Inc. (NASDAQ:AMGN) since 2012. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Amgen.

Check out our latest analysis for Amgen

How Does Total Compensation For Bob Bradway Compare With Other Companies In The Industry?

According to our data, Amgen Inc. has a market capitalization of US$132b, and paid its CEO total annual compensation worth US$20m over the year to December 2019. That's a modest increase of 5.7% on the prior year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.6m.

For comparison, other companies in the industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$17m. From this we gather that Bob Bradway is paid around the median for CEOs in the industry. Moreover, Bob Bradway also holds US$112m worth of Amgen stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component

2019

2018

Proportion (2019)

Salary

US$1.6m

US$1.6m

8%

Other

US$18m

US$17m

92%

Total Compensation

US$20m

US$19m

100%

On an industry level, around 24% of total compensation represents salary and 76% is other remuneration. Amgen sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
ceo-compensation

Amgen Inc.'s Growth

Over the past three years, Amgen Inc. has seen its earnings per share (EPS) grow by 3.7% per year. Its revenue is up 3.1% over the last year.

We're not particularly impressed by the revenue growth, but it is good to see modest EPS growth. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Amgen Inc. Been A Good Investment?

Boasting a total shareholder return of 39% over three years, Amgen Inc. has done well by shareholders. 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.

In Summary...

As we touched on above, Amgen Inc. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But the business isn't reporting great numbers in terms of EPS growth. Meanwhile, shareholder returns have remained positive over the same time frame. So while shareholders shouldn't be overly concerned about CEO compensation, we suspect most would prefer to see improved performance, before a bump in pay.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 2 warning signs for Amgen that investors should be aware of in a dynamic business environment.

Switching gears from Amgen, 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.