Scott Tarriff became the CEO of Eagle Pharmaceuticals, Inc. (NASDAQ:EGRX) in 2007. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we’ll consider growth that the business demonstrates. 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.
How Does Scott Tarriff’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Eagle Pharmaceuticals, Inc. has a market cap of US$607m, and is paying total annual CEO compensation of US$8.0m. (This number is for the twelve months until 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$747k. When we examined a selection of companies with market caps ranging from US$400m to US$1.6b, we found the median CEO compensation was US$2.3m.
Thus we can conclude that Scott Tarriff receives more in total compensation than the median of a group of companies in the same market, and of similar size to Eagle Pharmaceuticals, Inc.. However, this doesn’t necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at Eagle Pharmaceuticals has changed over time.
Is Eagle Pharmaceuticals, Inc. Growing?
Eagle Pharmaceuticals, Inc. has increased its earnings per share (EPS) by an average of 42% a year, over the last three years In the last year, its revenue is down -25%.
This demonstrates that the company has been improving recently. A good result. The lack of revenue growth isn’t ideal, but it is the bottom line that counts most in business.
It could be important to check this free visual depiction of what analysts expect for the future.
Has Eagle Pharmaceuticals, Inc. Been A Good Investment?
Since shareholders would have lost about 52% over three years, some Eagle Pharmaceuticals, Inc. shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
We compared total CEO remuneration at Eagle Pharmaceuticals, Inc. with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark 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. 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. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Eagle Pharmaceuticals (free visualization of insider trades).
Or you might prefer this data-rich interactive visualization of historic revenue and earnings.
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 email@example.com.