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In 2009 J. Kim was appointed CEO of Inovio Pharmaceuticals, Inc. (NASDAQ:INO). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does J. Kim's Compensation Compare With Similar Sized Companies?
Our data indicates that Inovio Pharmaceuticals, Inc. is worth US$290m, and total annual CEO compensation is US$3.1m. (This number is for the twelve months until December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$727k. When we examined a selection of companies with market caps ranging from US$100m to US$400m, we found the median CEO total compensation was US$1.2m.
Thus we can conclude that J. Kim receives more in total compensation than the median of a group of companies in the same market, and of similar size to Inovio Pharmaceuticals, Inc.. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at Inovio Pharmaceuticals has changed over time.
Is Inovio Pharmaceuticals, Inc. Growing?
Over the last three years Inovio Pharmaceuticals, Inc. has shrunk its earnings per share by an average of 15% per year (measured with a line of best fit). Its revenue is down -4.8% over last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.
Has Inovio Pharmaceuticals, Inc. Been A Good Investment?
Given the total loss of 66% over three years, many shareholders in Inovio Pharmaceuticals, Inc. are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
We compared the total CEO remuneration paid by Inovio Pharmaceuticals, Inc., 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.
We think many shareholders would be underwhelmed with the business growth over the last three years.
Just as bad, share price gains for investors have failed to materialize, over the same period. This analysis suggests to us that the CEO is paid too generously! Shareholders may want to check for free if Inovio Pharmaceuticals insiders are buying or selling shares.
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.
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.