Martine Rothblatt became the CEO of United Therapeutics Corporation (NASDAQ:UTHR) in 2016. 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. This method should give us information to assess how appropriately the company pays the CEO.
How Does Martine Rothblatt's Compensation Compare With Similar Sized Companies?
Our data indicates that United Therapeutics Corporation is worth US$3.5b, and total annual CEO compensation is US$16m. (This figure is for the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at US$1.2m. We examined companies with market caps from US$2.0b to US$6.4b, and discovered that the median CEO total compensation of that group was US$5.1m.
As you can see, Martine Rothblatt is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean United Therapeutics Corporation is paying too much. 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 United Therapeutics, below.
Is United Therapeutics Corporation Growing?
Over the last three years United Therapeutics Corporation has shrunk its earnings per share by an average of 45% per year (measured with a line of best fit). It saw its revenue drop -12% over the last year.
Sadly for shareholders, earnings per share are actually down, over three years. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. It could be important to check this free visual depiction of what analysts expect for the future.
Has United Therapeutics Corporation Been A Good Investment?
With a three year total loss of 37%, United Therapeutics Corporation would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We compared the total CEO remuneration paid by United Therapeutics Corporation, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.
Over the same period, investors would have come away with nothing in the way of share price gains. Some might well form the view that the CEO is paid too generously! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling United Therapeutics (free visualization of insider trades).
Important note: United Therapeutics 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.
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