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Why Idera Pharmaceuticals' (NASDAQ:IDRA) CEO Pay Matters

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  • IDRA

This article will reflect on the compensation paid to Vinnie, Vin Milano who has served as CEO of Idera Pharmaceuticals, Inc. (NASDAQ:IDRA) since 2014. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Idera Pharmaceuticals

How Does Total Compensation For Vinnie, Vin Milano Compare With Other Companies In The Industry?

Our data indicates that Idera Pharmaceuticals, Inc. has a market capitalization of US$69m, and total annual CEO compensation was reported as US$1.3m for the year to December 2019. Notably, that's a decrease of 25% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$600k.

For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$1.1m. So it looks like Idera Pharmaceuticals compensates Vinnie, Vin Milano in line with the median for the industry. What's more, Vinnie, Vin Milano holds US$121k worth of shares in the company in their own name.

Component

2019

2018

Proportion (2019)

Salary

US$600k

US$600k

45%

Other

US$737k

US$1.2m

55%

Total Compensation

US$1.3m

US$1.8m

100%

On an industry level, roughly 23% of total compensation represents salary and 77% is other remuneration. Idera Pharmaceuticals pays out 45% of remuneration in the form of a salary, significantly higher than the industry average. 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

Idera Pharmaceuticals, Inc.'s Growth

Over the past three years, Idera Pharmaceuticals, Inc. has seen its earnings per share (EPS) grow by 11% per year. It has seen most of its revenue evaporate over the past year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Idera Pharmaceuticals, Inc. Been A Good Investment?

With a three year total loss of 88% for the shareholders, Idera Pharmaceuticals, Inc. would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As previously discussed, Vinnie, Vin is compensated close to the median for companies of its size, and which belong to the same industry. At the same time, the company has logged negative shareholder returns over the last three years. But EPS growth is moving in a favorable direction, certainly a positive sign. It's tough for us to say CEO compensation is too generous when EPS growth is positive, but negative investor returns will irk shareholders and reduce any chances of a raise.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 5 warning signs for Idera Pharmaceuticals (1 doesn't sit too well with us!) that you should be aware of before investing here.

Switching gears from Idera Pharmaceuticals, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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.