Does Spark Therapeutics, Inc.’s (NASDAQ:ONCE) CEO Pay Reflect Performance?

In 2013 Jeff Marrazzo was appointed CEO of Spark Therapeutics, Inc. (NASDAQ:ONCE). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. 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.

Check out our latest analysis for Spark Therapeutics

How Does Jeff Marrazzo’s Compensation Compare With Similar Sized Companies?

Our data indicates that Spark Therapeutics, Inc. is worth US$1.5b, and total annual CEO compensation is US$4.9m. (This number is for the twelve months until 2017). While we always look at total compensation first, we note that the salary component is less, at US$563k. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO compensation was US$3.7m.

It would therefore appear that Spark Therapeutics, Inc. pays Jeff Marrazzo more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

The graphic below shows how CEO compensation at Spark Therapeutics has changed from year to year.

NasdaqGS:ONCE CEO Compensation January 1st 19
NasdaqGS:ONCE CEO Compensation January 1st 19

Is Spark Therapeutics, Inc. Growing?

On average over the last three years, Spark Therapeutics, Inc. has shrunk earnings per share by 20% each year. It achieved revenue growth of 181% over the last year.

The reduction in earnings per share, over three years, is arguably concerning. On the other hand, the strong revenue growth suggests the business is growing. In conclusion we can’t form a strong opinion about business performance yet; but it’s one worth watching.

You might want to check this free visual report on analyst forecasts for future earnings.

Has Spark Therapeutics, Inc. Been A Good Investment?

Given the total loss of 15% over three years, many shareholders in Spark Therapeutics, Inc. are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.

In Summary…

We examined the amount Spark Therapeutics, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

While we have not been overly impressed by the business performance, the shareholder returns, over three years, have been disappointing. Although we’d stop short of calling it inappropriate, we think the CEO compensation is probably more on the generous side of things. Whatever your view on compensation, you might want to check if insiders are buying or selling Spark Therapeutics shares (free trial).

Or you might prefer this data-rich interactive visualization of historic revenue and earnings.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.