In 2008 Kevin Gorman was appointed CEO of Neurocrine Biosciences, Inc. (NASDAQ:NBIX). This analysis aims first to contrast CEO compensation with other large companies. After that, we will consider the growth in the business. 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 Kevin Gorman's Compensation Compare With Similar Sized Companies?
According to our data, Neurocrine Biosciences, Inc. has a market capitalization of US$10b, and paid its CEO total annual compensation worth US$8.6m over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$675k. 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 group of companies with market caps over US$8.0b, we found that their median CEO total compensation was US$11m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts - even though some are quite a bit bigger than others).
That means Kevin Gorman receives fairly typical remuneration for the CEO of a large company. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
You can see a visual representation of the CEO compensation at Neurocrine Biosciences, below.
Is Neurocrine Biosciences, Inc. Growing?
On average over the last three years, Neurocrine Biosciences, Inc. has grown earnings per share (EPS) by 79% each year (using a line of best fit). It achieved revenue growth of 63% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. It could be important to check this free visual depiction of what analysts expect for the future.
Has Neurocrine Biosciences, Inc. Been A Good Investment?
Boasting a total shareholder return of 149% over three years, Neurocrine Biosciences, Inc. has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
Remuneration for Kevin Gorman is close enough to the median pay for a CEO of a large company .
Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. Whatever your view on compensation, you might want to check if insiders are buying or selling Neurocrine Biosciences 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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.
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