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Is Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) Excessively Paying Its CEO?

Simply Wall St

Schleifer Leonard S. became the CEO of Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) in 1988. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. After that, we will consider the growth in the business. 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.

See our latest analysis for Regeneron Pharmaceuticals

How Does Schleifer Leonard S.'s Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Regeneron Pharmaceuticals, Inc. has a market cap of US$30b, and reported total annual CEO compensation of US$27m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$1.3m. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO total compensation was US$11m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts - even though some are quite a bit bigger than others).

As you can see, Schleifer Leonard S. is paid more than the median CEO pay at large companies, in the same market. However, this does not necessarily mean Regeneron Pharmaceuticals, Inc. is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

The graphic below shows how CEO compensation at Regeneron Pharmaceuticals has changed from year to year.

NasdaqGS:REGN CEO Compensation, October 1st 2019

Is Regeneron Pharmaceuticals, Inc. Growing?

Over the last three years Regeneron Pharmaceuticals, Inc. has grown its earnings per share (EPS) by an average of 38% per year (using a line of best fit). In the last year, its revenue is up 17%.

This shows that the company has improved itself over the last few years. Good news for shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Shareholders might be interested in this free visualization of analyst forecasts.

Has Regeneron Pharmaceuticals, Inc. Been A Good Investment?

With a three year total loss of 31%, Regeneron Pharmaceuticals, Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

We compared total CEO remuneration at Regeneron Pharmaceuticals, Inc. with the amount paid at other large companies. We found that it pays well over the median amount paid in the benchmark group.

However, the earnings per share growth over three years is certainly impressive. Having said that, shareholders may be disappointed with the weak returns over the last three years. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. Whatever your view on compensation, you might want to check if insiders are buying or selling Regeneron Pharmaceuticals shares (free trial).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.