This Is The Reason Why We Think Pfizer Limited's (NSE:PFIZER) CEO Deserves A Bump Up To Their Compensation

Shareholders will be pleased by the impressive results for Pfizer Limited (NSE:PFIZER) recently and CEO Sridhar Subramaniam has played a key role. This would be kept in mind at the upcoming AGM on 19 August 2021 which will be a chance for them to hear the board review the financial results, discuss future company strategy and vote on resolutions such as executive remuneration and other matters. Let's take a look at why we think the CEO has done a good job and we'll present the case for a bump in pay.

View our latest analysis for Pfizer

Comparing Pfizer Limited's CEO Compensation With the industry

Our data indicates that Pfizer Limited has a market capitalization of ₹266b, and total annual CEO compensation was reported as ₹50m for the year to March 2021. We note that's an increase of 22% above last year. In particular, the salary of ₹30.4m, makes up a huge portion of the total compensation being paid to the CEO.

On examining similar-sized companies in the industry with market capitalizations between ₹149b and ₹475b, we discovered that the median CEO total compensation of that group was ₹82m. In other words, Pfizer pays its CEO lower than the industry median.

On an industry level, around 95% of total compensation represents salary and 5% is other remuneration. In Pfizer's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Pfizer Limited's Growth

Pfizer Limited's earnings per share (EPS) grew 13% per year over the last three years. It achieved revenue growth of 17% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Pfizer Limited Been A Good Investment?

Most shareholders would probably be pleased with Pfizer Limited for providing a total return of 109% over three years. 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.

To Conclude...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Pfizer that you should be aware of before investing.

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.

If you decide to trade Pfizer, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.