This article will reflect on the compensation paid to Jean-Jacques Bienaimé who has served as CEO of BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) since 2005. This analysis will also assess whether BioMarin Pharmaceutical pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing BioMarin Pharmaceutical Inc.’s CEO Compensation With the industry
According to our data, BioMarin Pharmaceutical Inc. has a market capitalization of US$22b, and paid its CEO total annual compensation worth US$18m over the year to December 2019. That’s a notable increase of 18% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.2m.
For comparison, other companies in the industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$15m. This suggests that BioMarin Pharmaceutical remunerates its CEO largely in line with the industry average. Moreover, Jean-Jacques Bienaimé also holds US$67m worth of BioMarin Pharmaceutical stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, roughly 23% of total compensation represents salary and 77% is other remuneration. It’s interesting to note that BioMarin Pharmaceutical allocates a smaller portion of compensation to salary in comparison to the broader industry. It’s important to note that a slant towards non-salary compensation suggests that total pay is tied to the company’s performance.
A Look at BioMarin Pharmaceutical Inc.’s Growth Numbers
BioMarin Pharmaceutical Inc.’s earnings per share (EPS) grew 85% per year over the last three years. It achieved revenue growth of 19% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It’s also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has BioMarin Pharmaceutical Inc. Been A Good Investment?
Boasting a total shareholder return of 43% over three years, BioMarin Pharmaceutical Inc. has done well by shareholders. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.
As we noted earlier, BioMarin Pharmaceutical pays its CEO in line with similar-sized companies belonging to the same industry. Investors would surely be happy to see that returns have been great, and that earnings per share are up. So one could argue that CEO compensation is quite modest, if you consider company performance! In fact, shareholders might even think the CEO deserves a raise as a reward due to the fantastic returns generated.
CEO compensation can have a massive impact on performance, but it’s just one element. We did our research and spotted 2 warning signs for BioMarin Pharmaceutical that investors should look into moving forward.
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.
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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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