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Is OPKO Health, Inc.'s (NASDAQ:OPK) CEO Pay Fair?

Phil Frost became the CEO of OPKO Health, Inc. (NASDAQ:OPK) in 2007. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. 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.

View our latest analysis for OPKO Health

How Does Phil Frost's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that OPKO Health, Inc. has a market cap of US$1.3b, and is paying total annual CEO compensation of US$2.0m. (This number is for the twelve months until December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$960k. We examined companies with market caps from US$1.0b to US$3.2b, and discovered that the median CEO total compensation of that group was US$4.0m.

This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.

The graphic below shows how CEO compensation at OPKO Health has changed from year to year.

NasdaqGS:OPK CEO Compensation, July 29th 2019
NasdaqGS:OPK CEO Compensation, July 29th 2019

Is OPKO Health, Inc. Growing?

On average over the last three years, OPKO Health, Inc. has shrunk earnings per share by 79% each year (measured with a line of best fit). In the last year, its revenue changed by just 0.3%.

Few shareholders would be pleased to read that earnings per share are lower over three years. And the flat revenue hardly impresses. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.

Has OPKO Health, Inc. Been A Good Investment?

Since shareholders would have lost about 79% over three years, some OPKO Health, Inc. shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

It looks like OPKO Health, Inc. pays its CEO less than similar sized companies.

Shareholders should note that compensation for Phil Frost is under the median of a group of similar sized companies. But then, EPS growth is lacking and so are the returns to shareholders. While one could argue it is appropriate for the CEO to be paid less than other CEOs of similar sized companies, given company performance, we would not call the pay overly generous. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling OPKO Health (free visualization of insider trades).

If you want to buy a stock that is better than OPKO Health, this free list of high return, low debt companies is a great place to look.

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 editorial-team@simplywallst.com. 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.

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