Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
In 1994 Gregory Demopulos was appointed CEO of Omeros Corporation (NASDAQ:OMER). 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. This process should give us an idea about how appropriately the CEO is paid.
How Does Gregory Demopulos's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Omeros Corporation has a market cap of US$866m, and is paying total annual CEO compensation of US$4.7m. (This is based on the year to December 2018). That's a modest increase of 4.5% on the prior year year. We think total compensation is more important but we note that the CEO salary is lower, at US$770k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$400m to US$1.6b. The median total CEO compensation was US$2.7m.
It would therefore appear that Omeros Corporation pays Gregory Demopulos more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see a visual representation of the CEO compensation at Omeros, below.
Is Omeros Corporation Growing?
Omeros Corporation has reduced its earnings per share by an average of 12% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is down -7.6%.
Sadly for shareholders, earnings per share are actually down, over three years. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.
Has Omeros Corporation Been A Good Investment?
I think that the total shareholder return of 53%, over three years, would leave most Omeros Corporation shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We compared total CEO remuneration at Omeros Corporation with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.
We think many shareholders would be underwhelmed with the business growth over the last three years.
However, we can't argue with the strong returns to shareholders, over the same time period. So on this analysis we'd stop short of criticizing the level of CEO compensation. So you may want to check if insiders are buying Omeros shares with their own money (free access).
Important note: Omeros may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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. Thank you for reading.