Is GW Pharmaceuticals plc’s (NASDAQ:GWPH) CEO Pay Fair?

In 1999 Justin Gover was appointed CEO of GW Pharmaceuticals plc (NASDAQ:GWPH). 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.

View our latest analysis for GW Pharmaceuticals

How Does Justin Gover’s Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that GW Pharmaceuticals plc has a market cap of US$3.2b, and reported total annual CEO compensation of US$566k for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$140k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We examined companies with market caps from US$2.0b to US$6.4b, and discovered that the median CEO total compensation of that group was US$5.1m.

Most shareholders would consider it a positive that Justin Gover takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it’s important we delve into the performance of the actual business.

You can see, below, how CEO compensation at GW Pharmaceuticals has changed over time.

NasdaqGM:GWPH CEO Compensation, January 1st 2020
NasdaqGM:GWPH CEO Compensation, January 1st 2020

Is GW Pharmaceuticals plc Growing?

GW Pharmaceuticals plc has reduced its earnings per share by an average of 7.0% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 1628% over the last year.

Investors should note that, over three years, earnings per share are down. On the other hand, the strong revenue growth suggests the business is growing. These two metric are moving in different directions, so while it’s hard to be confident judging performance, we think the stock is worth watching. You might want to check this free visual report on analyst forecasts for future earnings.

Has GW Pharmaceuticals plc Been A Good Investment?

Since shareholders would have lost about 11% over three years, some GW Pharmaceuticals plc shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary…

It looks like GW Pharmaceuticals plc pays its CEO less than similar sized companies.

Justin Gover receives relatively low remuneration compared to similar sized companies. But the company isn’t exactly firing on all cylinders, and returns over three years are not good. Many shareholders would probably like to see improvements, but our analysis does not suggest that CEO compensation is too generous. Shareholders may want to check for free if GW Pharmaceuticals insiders are buying or selling shares.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.