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This article will reflect on the compensation paid to Jack Khattar who has served as CEO of Supernus Pharmaceuticals, Inc. (NASDAQ:SUPN) since 2005. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
How Does Total Compensation For Jack Khattar Compare With Other Companies In The Industry?
At the time of writing, our data shows that Supernus Pharmaceuticals, Inc. has a market capitalization of US$1.4b, and reported total annual CEO compensation of US$8.1m for the year to December 2019. We note that's an increase of 13% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$812k.
In comparison with other companies in the industry with market capitalizations ranging from US$1.0b to US$3.2b, the reported median CEO total compensation was US$4.7m. Hence, we can conclude that Jack Khattar is remunerated higher than the industry median. What's more, Jack Khattar holds US$41m 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, around 27% of total compensation represents salary and 73% is other remuneration. It's interesting to note that Supernus Pharmaceuticals allocates a smaller portion of compensation to salary 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 Supernus Pharmaceuticals, Inc.'s Growth Numbers
Over the past three years, Supernus Pharmaceuticals, Inc. has seen its earnings per share (EPS) grow by 29% per year. It achieved revenue growth of 17% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. 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 Supernus Pharmaceuticals, Inc. Been A Good Investment?
Given the total shareholder loss of 33% over three years, many shareholders in Supernus Pharmaceuticals, Inc. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
As we noted earlier, Supernus Pharmaceuticals pays its CEO higher than the norm for similar-sized companies belonging to the same industry. However, the EPS growth is certainly impressive, but it's disappointing to see negative shareholder returns over the same period. Although we don't think the CEO pay is too high, considering negative investor returns, it is more generous than modest.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 3 warning signs for Supernus Pharmaceuticals (1 is significant!) that you should be aware of before investing here.
Important note: Supernus Pharmaceuticals 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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