Key Things To Understand About Omeros' (NASDAQ:OMER) CEO Pay Cheque
This article will reflect on the compensation paid to Greg Demopulos who has served as CEO of Omeros Corporation (NASDAQ:OMER) since 1994. This analysis will also assess whether Omeros pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
See our latest analysis for Omeros
Comparing Omeros Corporation's CEO Compensation With the industry
Our data indicates that Omeros Corporation has a market capitalization of US$713m, and total annual CEO compensation was reported as US$4.8m for the year to December 2019. That is, the compensation was roughly the same as last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$794k.
On examining similar-sized companies in the industry with market capitalizations between US$400m and US$1.6b, we discovered that the median CEO total compensation of that group was US$3.8m. This suggests that Omeros remunerates its CEO largely in line with the industry average. What's more, Greg Demopulos holds US$24m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
On an industry level, roughly 24% of total compensation represents salary and 76% is other remuneration. In Omeros' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Omeros Corporation's Growth Numbers
Omeros Corporation has reduced its earnings per share by 11% a year over the last three years. It achieved revenue growth of 33% over the last year.
The decrease in EPS could be a concern for some investors. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Omeros Corporation Been A Good Investment?
With a three year total loss of 45% for the shareholders, Omeros Corporation would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
As previously discussed, Greg is compensated close to the median for companies of its size, and which belong to the same industry. However, revenues have increased over the past year, a positive sign for the company. Contrarily, shareholder returns are in the red over the same stretch. EPS is also not growing, undoubtedly leading to further headaches. Overall, we wouldn't say CEO is highly paid, but shareholders might not go for a raise before business metrics start to improve precipitously.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 3 warning signs for Omeros that investors should be aware of in a dynamic business environment.
Important note: Omeros is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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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