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Sijmen de Vries has been the CEO of Pharming Group N.V. (AMS:PHARM) since 2008. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Sijmen de Vries's Compensation Compare With Similar Sized Companies?
According to our data, Pharming Group N.V. has a market capitalization of €501m, and pays its CEO total annual compensation worth €1.5m. (This number is for the twelve months until December 2017). While we always look at total compensation first, we note that the salary component is less, at €475k. We examined companies with market caps from €177m to €707m, and discovered that the median CEO total compensation of that group was €787k.
It would therefore appear that Pharming Group N.V. pays Sijmen de Vries more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see a visual representation of the CEO compensation at Pharming Group, below.
Is Pharming Group N.V. Growing?
Over the last three years Pharming Group N.V. has shrunk its earnings per share by an average of 16% per year (measured with a line of best fit). It achieved revenue growth of 51% over the last year.
As investors, we are a bit wary of companies that have lower earnings per share, over three years. But in contrast the revenue growth is strong, suggesting future potential for earnings growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. Shareholders might be interested in this free visualization of analyst forecasts.
Has Pharming Group N.V. Been A Good Investment?
Most shareholders would probably be pleased with Pharming Group N.V. for providing a total return of 276% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We compared total CEO remuneration at Pharming Group N.V. 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.
While we generally prefer to see stronger EPS growth, there's no arguing with the strong returns to shareholders, over the last three years. So, considering these tasty returns, the CEO compensation may be quite appropriate. Shareholders may want to check for free if Pharming Group insiders are buying or selling shares.
Important note: Pharming Group may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.