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This article will reflect on the compensation paid to Asaf Danziger who has served as CEO of NovoCure Limited (NASDAQ:NVCR) since 2002. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for NovoCure.
How Does Total Compensation For Asaf Danziger Compare With Other Companies In The Industry?
According to our data, NovoCure Limited has a market capitalization of US$11b, and paid its CEO total annual compensation worth US$7.3m over the year to December 2019. That's a notable increase of 60% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$702k.
For comparison, other companies in the industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$9.5m. So it looks like NovoCure compensates Asaf Danziger in line with the median for the industry. Moreover, Asaf Danziger also holds US$19m worth of NovoCure stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Talking in terms of the industry, salary represented approximately 20% of total compensation out of all the companies we analyzed, while other remuneration made up 80% of the pie. In NovoCure's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at NovoCure Limited's Growth Numbers
NovoCure Limited has seen its earnings per share (EPS) increase by 67% a year over the past three years. Its revenue is up 39% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has NovoCure Limited Been A Good Investment?
Most shareholders would probably be pleased with NovoCure Limited for providing a total return of 395% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
As we touched on above, NovoCure Limited 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. The company is growing EPS and total shareholder returns have been pleasing. Although the pay is close to the industry median, overall performance is excellent, so we don't think the CEO is paid too generously. In fact, shareholders might even think the CEO deserves a raise as a reward due to the fantastic returns generated.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 5 warning signs for NovoCure (of which 1 doesn't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.
Switching gears from NovoCure, 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.
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