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How Should Investors React To Intra-Cellular Therapies, Inc.'s (NASDAQ:ITCI) CEO Pay?

Simply Wall St

Sharon Mates has been the CEO of Intra-Cellular Therapies, Inc. (NASDAQ:ITCI) since 2013. 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.

See our latest analysis for Intra-Cellular Therapies

How Does Sharon Mates's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Intra-Cellular Therapies, Inc. has a market cap of US$461m, and is paying total annual CEO compensation of US$4.5m. (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 US$723k. We looked at a group of companies with market capitalizations from US$200m to US$800m, and the median CEO total compensation was US$1.9m.

Thus we can conclude that Sharon Mates receives more in total compensation than the median of a group of companies in the same market, and of similar size to Intra-Cellular Therapies, Inc.. However, this doesn't necessarily mean the pay is too high. 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 a visual representation of the CEO compensation at Intra-Cellular Therapies, below.

NasdaqGS:ITCI CEO Compensation, August 28th 2019
NasdaqGS:ITCI CEO Compensation, August 28th 2019

Is Intra-Cellular Therapies, Inc. Growing?

Intra-Cellular Therapies, Inc. saw earnings per share stay pretty flat over the last three years, albeit with a slight decrease, according to the line of best fit. In the last year, its revenue is down -99%.

Unfortunately there is a complete lack of earnings per share improvement, over three years. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.

Has Intra-Cellular Therapies, Inc. Been A Good Investment?

With a three year total loss of 79%, Intra-Cellular Therapies, Inc. would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We compared total CEO remuneration at Intra-Cellular Therapies, Inc. with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.

Earnings per share have not grown in three years, and the revenue growth fails to impress us.

Just as bad, share price gains for investors have failed to materialize, over the same period. In our opinion the CEO might be paid too generously! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Intra-Cellular Therapies.

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.