Mihael Polymeropoulos has been the CEO of Vanda Pharmaceuticals Inc. (NASDAQ:VNDA) since 2003. 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 process should give us an idea about how appropriately the CEO is paid.
How Does Mihael Polymeropoulos's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Vanda Pharmaceuticals Inc. has a market cap of US$748m, and is paying total annual CEO compensation of US$4.3m. (This is based on the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$700k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$400m to US$1.6b. The median total CEO compensation was US$2.7m.
As you can see, Mihael Polymeropoulos is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Vanda Pharmaceuticals Inc. is paying too much. 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, below, how CEO compensation at Vanda Pharmaceuticals has changed over time.
Is Vanda Pharmaceuticals Inc. Growing?
On average over the last three years, Vanda Pharmaceuticals Inc. has grown earnings per share (EPS) by 115% each year (using a line of best fit). Its revenue is up 18% over last year.
This demonstrates that the company has been improving recently. A good result. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. You might want to check this free visual report on analyst forecasts for future earnings.
Has Vanda Pharmaceuticals Inc. Been A Good Investment?
With a three year total loss of 14%, Vanda Pharmaceuticals Inc. would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We examined the amount Vanda Pharmaceuticals Inc. pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
However, the earnings per share growth over three years is certainly impressive. On the other hand returns to investors over the same period have probably disappointed many. Considering the per share profit growth, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Vanda Pharmaceuticals.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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