How Should Investors Feel About Horizon Therapeutics Public Limited Company's (NASDAQ:HZNP) CEO Pay?
Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
In 2008 Tim Walbert was appointed CEO of Horizon Therapeutics Public Limited Company (NASDAQ:HZNP). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
View our latest analysis for Horizon Therapeutics
How Does Tim Walbert's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Horizon Therapeutics Public Limited Company has a market cap of US$4.4b, and is paying total annual CEO compensation of US$17m. (This is based on the year to December 2018). Notably, that's an increase of 617% over the year before. While we always look at total compensation first, we note that the salary component is less, at US$1.1m. We examined companies with market caps from US$2.0b to US$6.4b, and discovered that the median CEO total compensation of that group was US$5.3m.
Thus we can conclude that Tim Walbert receives more in total compensation than the median of a group of companies in the same market, and of similar size to Horizon Therapeutics Public Limited Company. 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.
You can see a visual representation of the CEO compensation at Horizon Therapeutics, below.
Is Horizon Therapeutics Public Limited Company Growing?
On average over the last three years, Horizon Therapeutics Public Limited Company has shrunk earnings per share by 17% each year (measured with a line of best fit). It achieved revenue growth of 19% over the last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. It could be important to check this free visual depiction of what analysts expect for the future.
Has Horizon Therapeutics Public Limited Company Been A Good Investment?
Most shareholders would probably be pleased with Horizon Therapeutics Public Limited Company for providing a total return of 34% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
We compared the total CEO remuneration paid by Horizon Therapeutics Public Limited Company, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.
On the other hand, returns have been good, so the company is doing something right. So on this analysis we'd stop short of criticizing the level of CEO compensation. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Horizon Therapeutics.
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.
