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Is Innate Pharma S.A. (EPA:IPH) Overpaying Its CEO?

Simply Wall St

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In 2016 Mondher Mahjoubi was appointed CEO of Innate Pharma S.A. (EPA:IPH). First, this article will compare CEO compensation with compensation at similar sized companies. 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.

View our latest analysis for Innate Pharma

How Does Mondher Mahjoubi's Compensation Compare With Similar Sized Companies?

Our data indicates that Innate Pharma S.A. is worth €362m, and total annual CEO compensation is €1.3m. (This is based on the year to December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at €470k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of €178m to €713m. The median total CEO compensation was €349k.

Thus we can conclude that Mondher Mahjoubi receives more in total compensation than the median of a group of companies in the same market, and of similar size to Innate Pharma S.A.. 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.

The graphic below shows how CEO compensation at Innate Pharma has changed from year to year.

ENXTPA:IPH CEO Compensation, July 19th 2019

Is Innate Pharma S.A. Growing?

Innate Pharma S.A. has reduced its earnings per share by an average of 60% a year, over the last three years (measured with a line of best fit). Its revenue is up 113% over last year.

The reduction in earnings per share, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. You might want to check this free visual report on analyst forecasts for future earnings.

Has Innate Pharma S.A. Been A Good Investment?

Since shareholders would have lost about 48% over three years, some Innate Pharma S.A. shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

We compared total CEO remuneration at Innate Pharma S.A. 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.

Over the last three years, shareholder returns have been downright disappointing, and the underlying business has failed to impress us. Shareholders may wish to consider further research. Although we don't think the CEO pay is too high, it is probably more on the generous side of things. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Innate Pharma.

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.

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.