It's Unlikely That Amgen Inc.'s (NASDAQ:AMGN) CEO Will See A Huge Pay Rise This Year

Key Insights

• Amgen to hold its Annual General Meeting on 23rd of May
• Salary of US$1.87m is part of CEO Bob Bradway's total remuneration
• The total compensation is 31% higher than the average for the industry
• Over the past three years, Amgen's EPS grew by 2.8% and over the past three years, the total shareholder return was 22%

We've discovered 2 warning signs about Amgen. View them for free.

Performance at Amgen Inc. (NASDAQ:AMGN) has been reasonably good and CEO Bob Bradway has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 23rd of May, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

See our latest analysis for Amgen

Comparing Amgen Inc.'s CEO Compensation With The Industry

At the time of writing, our data shows that Amgen Inc. has a market capitalization of US$141b, and reported total annual CEO compensation of US$24m for the year to December 2024. That's a fairly small increase of 7.9% over the previous year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.9m.

For comparison, other companies in the American Biotechs industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$19m. This suggests that Bob Bradway is paid more than the median for the industry. Moreover, Bob Bradway also holds US$150m worth of Amgen stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 22% of total compensation represents salary, while the remainder of 78% is other remuneration. It's interesting to note that Amgen allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Amgen Inc.'s Growth Numbers

Amgen Inc. has seen its earnings per share (EPS) increase by 2.8% a year over the past three years. It achieved revenue growth of 16% over the last year.

We would argue that the modest growth in revenue is a notable positive. And the improvement in EPSis modest but respectable. Although we'll stop short of calling the stock a top performer, we think the company has potential. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Amgen Inc. Been A Good Investment?

Amgen Inc. has generated a total shareholder return of 22% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus 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.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Amgen that investors should think about before committing capital to this stock.

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. 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.