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Jay Luly became the CEO of Enanta Pharmaceuticals, Inc. (NASDAQ:ENTA) in 2003. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Jay Luly's Compensation Compare With Similar Sized Companies?
According to our data, Enanta Pharmaceuticals, Inc. has a market capitalization of US$1.9b, and pays its CEO total annual compensation worth US$4.5m. (This number is for the twelve months until September 2018). While we always look at total compensation first, we note that the salary component is less, at US$611k. We examined companies with market caps from US$1.0b to US$3.2b, and discovered that the median CEO total compensation of that group was US$4.1m.
So Jay Luly is paid around the average of the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see, below, how CEO compensation at Enanta Pharmaceuticals has changed over time.
Is Enanta Pharmaceuticals, Inc. Growing?
On average over the last three years, Enanta Pharmaceuticals, Inc. has grown earnings per share (EPS) by 62% each year (using a line of best fit). It achieved revenue growth of 41% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. Shareholders might be interested in this free visualization of analyst forecasts.
Has Enanta Pharmaceuticals, Inc. Been A Good Investment?
Boasting a total shareholder return of 324% over three years, Enanta Pharmaceuticals, Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Jay Luly is paid around the same as most CEOs of similar size companies.
Shareholders would surely be happy to see that shareholder returns have been great, and the earnings per share are up. Indeed, many might consider the pay rather modest, given the solid company performance! Whatever your view on compensation, you might want to check if insiders are buying or selling Enanta Pharmaceuticals shares (free trial).
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.
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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.