U.S. Markets open in 5 hrs 22 mins

Is Neurocrine Biosciences, Inc.’s (NASDAQ:NBIX) CEO Overpaid Relative To Its Peers?

Pam Parks

Kevin Gorman has been the CEO of Neurocrine Biosciences, Inc. (NASDAQ:NBIX) since 2008. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. 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.

Check out our latest analysis for Neurocrine Biosciences

Want to help shape the future of investing tools and platforms? Take the survey and be part of one of the most advanced studies of stock market investors to date.

How Does Kevin Gorman’s Compensation Compare With Similar Sized Companies?

Our data indicates that Neurocrine Biosciences, Inc. is worth US$6.8b, and total annual CEO compensation is US$7.6m. (This is based on the year to 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$640k. We examined companies with market caps from US$4.0b to US$12b, and discovered that the median CEO compensation of that group was US$7.0m.

So Kevin Gorman 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 a visual representation of the CEO compensation at Neurocrine Biosciences, below.

NasdaqGS:NBIX CEO Compensation January 11th 19

Is Neurocrine Biosciences, Inc. Growing?

On average over the last three years, Neurocrine Biosciences, Inc. has grown earnings per share (EPS) by 9.4% each year (using a line of best fit). Its revenue is up 517% over last year.

It’s great to see that revenue growth is strong. And in that context, the modest EPS improvement certainly isn’t shabby. I’d stop short of saying the business performance is amazing, but there are enough positives to justify further research, or even adding the stock to your watch-list.

Shareholders might be interested in this free visualization of analyst forecasts. .

Has Neurocrine Biosciences, Inc. Been A Good Investment?

Most shareholders would probably be pleased with Neurocrine Biosciences, Inc. for providing a total return of 76% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary…

Kevin Gorman is paid around the same as most CEOs of similar size companies.

While we would like to see improved growth metrics, there is no doubt that the total returns have been great, over the last three years. So we can conclude that on this analysis the CEO compensation seems pretty sound. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Neurocrine Biosciences.

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 editorial-team@simplywallst.com.