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Martine Rothblatt became the CEO of United Therapeutics Corporation (NASDAQ:UTHR) in 2016. 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. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Martine Rothblatt’s Compensation Compare With Similar Sized Companies?
According to our data, United Therapeutics Corporation has a market capitalization of US$5.1b, and pays its CEO total annual compensation worth US$37m. (This figure is for the year to 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$1.2m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$4.0b to US$12b. The median total CEO compensation was US$6.4m.
Thus we can conclude that Martine Rothblatt receives more in total compensation than the median of a group of companies in the same market, and of similar size to United Therapeutics Corporation. 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 a visual representation of the CEO compensation at United Therapeutics, below.
Is United Therapeutics Corporation Growing?
Over the last three years United Therapeutics Corporation has shrunk its earnings per share by an average of 13% per year (measured with a line of best fit). In the last year, its revenue is up 2.5%.
Unfortunately, earnings per share have trended lower over the last three years. And the modest revenue growth over 12 months isn’t much comfort against the reduced earnings per share. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.
Has United Therapeutics Corporation Been A Good Investment?
Given the total loss of 9.0% over three years, many shareholders in United Therapeutics Corporation are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
We compared total CEO remuneration at United Therapeutics Corporation 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.
We think many shareholders would be underwhelmed with the business growth over the last three years.
Over the same period, investors would have come away with nothing in the way of share price gains. In our opinion the CEO might be paid too generously! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling United Therapeutics (free visualization of insider trades).
If you want to buy a stock that is better than United Therapeutics, this free list of high return, low debt companies is a great place to look.
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.