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Michael Kauffman became the CEO of Karyopharm Therapeutics Inc. (NASDAQ:KPTI) in 2011, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Karyopharm Therapeutics.
Comparing Karyopharm Therapeutics Inc.'s CEO Compensation With the industry
According to our data, Karyopharm Therapeutics Inc. has a market capitalization of US$1.0b, and paid its CEO total annual compensation worth US$3.2m over the year to December 2019. We note that's an increase of 42% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$567k.
For comparison, other companies in the same industry with market capitalizations ranging between US$400m and US$1.6b had a median total CEO compensation of US$2.6m. This suggests that Karyopharm Therapeutics remunerates its CEO largely in line with the industry average. Moreover, Michael Kauffman also holds US$7.9m worth of Karyopharm Therapeutics stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Speaking on an industry level, nearly 23% of total compensation represents salary, while the remainder of 77% is other remuneration. Karyopharm Therapeutics pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Karyopharm Therapeutics Inc.'s Growth
Over the last three years, Karyopharm Therapeutics Inc. has shrunk its earnings per share by 5.4% per year. Its revenue is up 710% over the last year.
The decrease in EPS could be a concern for some investors. On the other hand, the strong revenue growth suggests the business is growing. It's hard to reach a conclusion about business performance right now. This may be one to watch. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Karyopharm Therapeutics Inc. Been A Good Investment?
Karyopharm Therapeutics Inc. has generated a total shareholder return of 31% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
As we noted earlier, Karyopharm Therapeutics pays its CEO in line with similar-sized companies belonging to the same industry. But revenue growth over the last year can't be ignored. Shareholder returns, in comparison, have not been as impressive during the same period. An additional worry is EPS , which has posted negative growth in the previous three years. There's certainly room for improvement, but CEO compensation seems reasonable, considering the company's steady performance.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for Karyopharm Therapeutics that investors should think about before committing capital to this stock.
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.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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