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Scott Tarriff has been the CEO of Eagle Pharmaceuticals, Inc. (NASDAQ:EGRX) since 2007. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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. This method should give us information to assess how appropriately the company pays the CEO.
How Does Scott Tarriff's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Eagle Pharmaceuticals, Inc. has a market cap of US$789m, and is paying total annual CEO compensation of US$11m. (This is based on the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at US$769k. When we examined a selection of companies with market caps ranging from US$400m to US$1.6b, we found the median CEO total compensation was US$2.7m.
As you can see, Scott Tarriff is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Eagle Pharmaceuticals, Inc. is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at Eagle Pharmaceuticals has changed over time.
Is Eagle Pharmaceuticals, Inc. Growing?
Over the last three years Eagle Pharmaceuticals, Inc. has grown its earnings per share (EPS) by an average of 7.9% per year (using a line of best fit). In the last year, its revenue is up 4.8%.
I'd prefer higher revenue growth, but it is good to see modest EPS growth. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. You might want to check this free visual report on analyst forecasts for future earnings.
Has Eagle Pharmaceuticals, Inc. Been A Good Investment?
With a total shareholder return of 30% over three years, Eagle Pharmaceuticals, Inc. shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
We compared total CEO remuneration at Eagle Pharmaceuticals, Inc. with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.
Over the last three years returns to investors have been uninspiring, and we would have liked to see stronger business growth. So it's certainly hard to argue that the CEO is modestly paid, although we don't see the remuneration as an issue. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Eagle Pharmaceuticals.
Important note: Eagle Pharmaceuticals 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.
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 email@example.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.