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Is Intercept Pharmaceuticals, Inc.’s (NASDAQ:ICPT) CEO Pay Justified?

Frank Brewer

Mark Pruzanski has been the CEO of Intercept Pharmaceuticals, Inc. (NASDAQ:ICPT) since 2002. 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 method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Intercept Pharmaceuticals

How Does Mark Pruzanski’s Compensation Compare With Similar Sized Companies?

Our data indicates that Intercept Pharmaceuticals, Inc. is worth US$3.0b, and total annual CEO compensation is US$6.2m. (This figure is for the year to 2017). While we always look at total compensation first, we note that the salary component is less, at US$675k. We looked at a group of companies with market capitalizations from US$2.0b to US$6.4b, and the median CEO compensation was US$5.2m.

So Mark Pruzanski is paid around the average of 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 a visual representation of the CEO compensation at Intercept Pharmaceuticals, below.

NasdaqGS:ICPT CEO Compensation December 21st 18

Is Intercept Pharmaceuticals, Inc. Growing?

On average over the last three years, Intercept Pharmaceuticals, Inc. has shrunk earnings per share by 7.8% each year. Its revenue is up 53% over last year.

The reduction in earnings per share, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for earnings growth. In conclusion we can’t form a strong opinion about business performance yet; but it’s one worth watching.

Shareholders might be interested in this free visualization of analyst forecasts. .

Has Intercept Pharmaceuticals, Inc. Been A Good Investment?

Since shareholders would have lost about 37% over three years, some Intercept Pharmaceuticals, Inc. shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary…

Remuneration for Mark Pruzanski is close enough to the median pay for a CEO of a similar sized company .

We would like to see somewhat stronger per share growth. And shareholder returns have been disappointing over the last three years. So suffice it to say we don’t think the compensation is modest! So you may want to check if insiders are buying Intercept Pharmaceuticals shares with their own money (free access).

Or you might prefer gaze upon this detailed graph of past earnings, revenue and cash flow .

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.