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Is Oramed Pharmaceuticals Inc’s (NASDAQ:ORMP) CEO Paid Enough Relative To Peers?

Nadav Kidron has been the CEO of Oramed Pharmaceuticals Inc (NASDAQ:ORMP) since 2006. First, this article will compare CEO compensation with compensation at similar sized companies. 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. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for Oramed Pharmaceuticals

How Does Nadav Kidron’s Compensation Compare With Similar Sized Companies?

Our data indicates that Oramed Pharmaceuticals Inc is worth US$71m, and total annual CEO compensation is US$1.2m. (This is based on the year to 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$400k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO compensation to be US$296k.

It would therefore appear that Oramed Pharmaceuticals Inc pays Nadav Kidron 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 get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see, below, how CEO compensation at Oramed Pharmaceuticals has changed over time.

NasdaqCM:ORMP CEO Compensation November 27th 18

Is Oramed Pharmaceuticals Inc Growing?

Over the last three years Oramed Pharmaceuticals Inc has shrunk its earnings per share by an average of 8.4% per year. Its revenue is up 12% over last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration.

You might want to check this free visual report on analyst forecasts for future earnings.

Has Oramed Pharmaceuticals Inc Been A Good Investment?

Given the total loss of 55% over three years, many shareholders in Oramed Pharmaceuticals Inc are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.

In Summary…

We examined the amount Oramed Pharmaceuticals Inc pays its CEO, and compared it to the amount paid by similar sized companies. 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.

Over the same period, investors would have come away with nothing in the way of share price gains. This analysis suggests to us that the CEO is paid too generously! So you may want to check if insiders are buying Oramed Pharmaceuticals shares with their own money (free access).

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.