Howard Robin became the CEO of Nektar Therapeutics (NASDAQ:NKTR) in 2007. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. 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.
How Does Howard Robin's Compensation Compare With Similar Sized Companies?
According to our data, Nektar Therapeutics has a market capitalization of US$4.0b, and paid its CEO total annual compensation worth US$13m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$969k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We looked at a group of companies with market capitalizations from US$2.0b to US$6.4b, and the median CEO total compensation was US$4.9m.
Thus we can conclude that Howard Robin receives more in total compensation than the median of a group of companies in the same market, and of similar size to Nektar Therapeutics. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see a visual representation of the CEO compensation at Nektar Therapeutics, below.
Is Nektar Therapeutics Growing?
On average over the last three years, Nektar Therapeutics has grown earnings per share (EPS) by 38% each year (using a line of best fit). It saw its revenue drop 90% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. Revenue growth is a real positive for growth, but ultimately profits are more important. It could be important to check this free visual depiction of what analysts expect for the future.
Has Nektar Therapeutics Been A Good Investment?
Boasting a total shareholder return of 71% over three years, Nektar Therapeutics 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.
We compared total CEO remuneration at Nektar Therapeutics 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.
Importantly, though, the company has impressed with its earnings per share growth, over three years. On top of that, in the same period, returns to shareholders have been great. So, considering this good performance, the CEO compensation may be quite appropriate. So you may want to check if insiders are buying Nektar Therapeutics shares with their own money (free access).
If you want to buy a stock that is better than Nektar Therapeutics, this free list of high return, low debt companies is a great place to look.
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