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Should You Worry About Enanta Pharmaceuticals, Inc.'s (NASDAQ:ENTA) CEO Pay Cheque?

Simply Wall St

Jay Luly has been the CEO of Enanta Pharmaceuticals, Inc. (NASDAQ:ENTA) since 2003. 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. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for Enanta Pharmaceuticals

How Does Jay Luly's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Enanta Pharmaceuticals, Inc. has a market cap of US$1.3b, and reported total annual CEO compensation of US$4.5m for the year to September 2018. While we always look at total compensation first, we note that the salary component is less, at US$611k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO total compensation was US$3.9m.

That means Jay Luly receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.

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

NasdaqGS:ENTA CEO Compensation, December 9th 2019

Is Enanta Pharmaceuticals, Inc. Growing?

Over the last three years Enanta Pharmaceuticals, Inc. has grown its earnings per share (EPS) by an average of 64% per year (using a line of best fit). The trailing twelve months of revenue was pretty much the same as the prior period.

This demonstrates that the company has been improving recently. A good result. Revenue growth is a real positive for growth, but ultimately profits are more important. It could be important to check this free visual depiction of what analysts expect for the future.

Has Enanta Pharmaceuticals, Inc. Been A Good Investment?

I think that the total shareholder return of 95%, over three years, would leave most Enanta Pharmaceuticals, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Jay Luly is paid around the same as most CEOs of similar size companies.

Shareholders would surely be happy to see that shareholder returns have been great, and the earnings per share are up. So one could argue the CEO compensation is quite modest, if you consider company performance! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Enanta Pharmaceuticals.

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.

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.

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. Thank you for reading.