Howard Robin has been the CEO of Nektar Therapeutics (NASDAQ:NKTR) since 2007. 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. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Howard Robin’s Compensation Compare With Similar Sized Companies?
According to our data, Nektar Therapeutics has a market capitalization of US$5.3b, and pays its CEO total annual compensation worth US$18m. (This is based on the year to 2017). While we always look at total compensation first, we note that the salary component is less, at US$941k. When we examined a selection of companies with market caps ranging from US$4.0b to US$12b, we found the median CEO compensation was US$7.2m.
Thus we can conclude that Howard Robin receives more in total compensation than the median of a group of companies in the same market, and of similar size to Nektar Therapeutics. However, this doesn’t necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Nektar Therapeutics has changed over time.
Is Nektar Therapeutics Growing?
On average over the last three years, Nektar Therapeutics has grown earnings per share (EPS) by 89% each year. It achieved revenue growth of 400% over the last year.
This demonstrates that the company has been improving recently. A good result. It’s great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly.
You might want to check this free visual report on analyst forecasts for future earnings.
Has Nektar Therapeutics Been A Good Investment?
I think that the total shareholder return of 77%, over three years, would leave most Nektar Therapeutics shareholders smiling. So they may not be at all concerned if the CEO is paid more than is normal for companies around the same size.
We compared the total CEO remuneration paid by Nektar Therapeutics, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. Even better, returns to shareholders have been plentiful, over the same time period. As a result of this good performance, the CEO remuneration may well be quite reasonable. Whatever your view on compensation, you might want to check if insiders are buying or selling Nektar Therapeutics shares (free trial).
Of course, the past can be informative so you might be interested in considering this analytical visualization showing the company history of earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.