In 2006 Craig Wheeler was appointed CEO of Momenta Pharmaceuticals, Inc. (NASDAQ:MNTA). 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 process should give us an idea about how appropriately the CEO is paid.
How Does Craig Wheeler’s Compensation Compare With Similar Sized Companies?
According to our data, Momenta Pharmaceuticals, Inc. has a market capitalization of US$1.3b, and pays its CEO total annual compensation worth US$4.8m. (This figure is for the year to December 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$750k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$3.4m.
As you can see, Craig Wheeler is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Momenta Pharmaceuticals, Inc. is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at Momenta Pharmaceuticals has changed over time.
Is Momenta Pharmaceuticals, Inc. Growing?
Momenta Pharmaceuticals, Inc. has reduced its earnings per share by an average of 23% a year, over the last three years (measured with a line of best fit). It saw its revenue drop -46% over the last year.
Sadly for shareholders, earnings per share are actually down, over three years. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has Momenta Pharmaceuticals, Inc. Been A Good Investment?
I think that the total shareholder return of 54%, over three years, would leave most Momenta Pharmaceuticals, Inc. shareholders smiling. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.
We examined the amount Momenta Pharmaceuticals, Inc. pays its CEO, and compared it to the amount paid by 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. Given this situation we doubt shareholders are particularly concerned about the CEO compensation. Shareholders may want to check for free if Momenta Pharmaceuticals insiders are buying or selling shares.
If you want to buy a stock that is better than Momenta Pharmaceuticals, this free list of high return, low debt companies is a great place to look.
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