Is Incyte Corporation's (NASDAQ:INCY) CEO Pay Justified?
Hervé Hoppenot became the CEO of Incyte Corporation (NASDAQ:INCY) in 2014. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big 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.
See our latest analysis for Incyte
How Does Hervé Hoppenot's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Incyte Corporation has a market cap of US$16b, and reported total annual CEO compensation of US$9.3m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$996k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO total compensation to be US$11m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
So Hervé Hoppenot receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see, below, how CEO compensation at Incyte has changed over time.
Is Incyte Corporation Growing?
Over the last three years Incyte Corporation has grown its earnings per share (EPS) by an average of 24% per year (using a line of best fit). It achieved revenue growth of 16% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. It could be important to check this free visual depiction of what analysts expect for the future.
Has Incyte Corporation Been A Good Investment?
Given the total loss of 12% over three years, many shareholders in Incyte Corporation are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary...
Hervé Hoppenot is paid around what is normal the leaders of larger companies.
We'd say the company can boast of its EPS growth, but we find the returns over the last three years to be lacking. Considering the improvement in earnings per share, one could argue that the CEO pay is appropriate, albeit not too low. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Incyte.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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 editorial-team@simplywallst.com. 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.
