It's Unlikely That Hikma Pharmaceuticals PLC's (LON:HIK) CEO Will See A Huge Pay Rise This Year

CEO Siggi Olafsson has done a decent job of delivering relatively good performance at Hikma Pharmaceuticals PLC (LON:HIK) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 23 April 2021. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

See our latest analysis for Hikma Pharmaceuticals

Comparing Hikma Pharmaceuticals PLC's CEO Compensation With the industry

At the time of writing, our data shows that Hikma Pharmaceuticals PLC has a market capitalization of UK£5.7b, and reported total annual CEO compensation of US$3.7m for the year to December 2020. We note that's a decrease of 9.8% compared to last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.1m.

For comparison, other companies in the same industry with market capitalizations ranging between UK£2.9b and UK£8.7b had a median total CEO compensation of US$1.8m. This suggests that Siggi Olafsson is paid more than the median for the industry. Moreover, Siggi Olafsson also holds UK£571k worth of Hikma Pharmaceuticals stock directly under their own name.

Component	2020	2019	Proportion (2020)
Salary	US$1.1m	US$1.1m	30%
Other	US$2.6m	US$3.0m	70%
Total Compensation	US$3.7m	US$4.1m	100%

Talking in terms of the industry, salary represented approximately 52% of total compensation out of all the companies we analyzed, while other remuneration made up 48% of the pie. Hikma Pharmaceuticals pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Hikma Pharmaceuticals PLC's Growth Numbers

Hikma Pharmaceuticals PLC's earnings per share (EPS) grew 97% per year over the last three years. It achieved revenue growth of 6.0% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Hikma Pharmaceuticals PLC Been A Good Investment?

Boasting a total shareholder return of 114% over three years, Hikma Pharmaceuticals PLC has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

Whatever your view on compensation, you might want to check if insiders are buying or selling Hikma Pharmaceuticals shares (free trial).

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

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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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