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Jack Zhang has been the CEO of Amphastar Pharmaceuticals, Inc. (NASDAQ:AMPH) since 1996. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Jack Zhang's Compensation Compare With Similar Sized Companies?
According to our data, Amphastar Pharmaceuticals, Inc. has a market capitalization of US$979m, and paid its CEO total annual compensation worth US$5.9m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$1.1m. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. When we examined a selection of companies with market caps ranging from US$400m to US$1.6b, we found the median CEO total compensation was US$2.7m.
As you can see, Jack Zhang is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Amphastar 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 a visual representation of the CEO compensation at Amphastar Pharmaceuticals, below.
Is Amphastar Pharmaceuticals, Inc. Growing?
On average over the last three years, Amphastar Pharmaceuticals, Inc. has shrunk earnings per share by 1.5% each year (measured with a line of best fit). Its revenue is up 31% over last year.
Investors should note that, over three years, earnings per share are down. On the other hand, the strong revenue growth suggests the business is growing. These two metric are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. You might want to check this free visual report on analyst forecasts for future earnings.
Has Amphastar Pharmaceuticals, Inc. Been A Good Investment?
With a total shareholder return of 3.3% over three years, Amphastar Pharmaceuticals, Inc. has done okay by shareholders. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
We compared total CEO remuneration at Amphastar Pharmaceuticals, Inc. with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
One might like to have seen stronger growth, and the shareholder returns have failed to inspire, over the last three years. So it's certainly hard to argue that the CEO is modestly paid, although we don't see the remuneration as an issue. Shareholders may want to check for free if Amphastar Pharmaceuticals insiders are buying or selling shares.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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 email@example.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.