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A Quick Analysis On Insmed's (NASDAQ:INSM) CEO Salary

Simply Wall St

This article will reflect on the compensation paid to Will Lewis who has served as CEO of Insmed Incorporated (NASDAQ:INSM) since 2012. This analysis will also assess whether Insmed pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Insmed

Comparing Insmed Incorporated's CEO Compensation With the industry

Our data indicates that Insmed Incorporated has a market capitalization of US$2.6b, and total annual CEO compensation was reported as US$7.2m for the year to December 2019. We note that's an increase of 21% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$641k.

On examining similar-sized companies in the industry with market capitalizations between US$2.0b and US$6.4b, we discovered that the median CEO total compensation of that group was US$7.8m. This suggests that Insmed remunerates its CEO largely in line with the industry average. What's more, Will Lewis holds US$298k worth of shares in the company in their own name.

Component

2019

2018

Proportion (2019)

Salary

US$641k

US$610k

9%

Other

US$6.5m

US$5.3m

91%

Total Compensation

US$7.2m

US$5.9m

100%

On an industry level, around 23% of total compensation represents salary and 77% is other remuneration. In Insmed's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
ceo-compensation

Insmed Incorporated's Growth

Insmed Incorporated has reduced its earnings per share by 5.0% a year over the last three years. In the last year, its revenue is up 372%.

Investors would be a bit wary of companies that have lower earnings But in contrast the revenue growth is strong, suggesting future potential for earnings growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Insmed Incorporated Been A Good Investment?

Most shareholders would probably be pleased with Insmed Incorporated for providing a total return of 59% 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...

As we touched on above, Insmed Incorporated is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. The company has logged solid shareholder returns for the past three years. At the same time, revenues are also moving northwards at a healthy pace. On a sour note, EPS growth has been negative. Considering overall performance, it's fair to say Will is paid reasonably.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Insmed that you should be aware of before investing.

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.

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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.