Shareholders May Not Be So Generous With Amphastar Pharmaceuticals, Inc.'s (NASDAQ:AMPH) CEO Compensation And Here's Why

By
Simply Wall St
Published
May 31, 2021
NasdaqGS:AMPH

Under the guidance of CEO Jack Zhang, Amphastar Pharmaceuticals, Inc. (NASDAQ:AMPH) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 07 June 2021. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

View our latest analysis for Amphastar Pharmaceuticals

How Does Total Compensation For Jack Zhang Compare With Other Companies In The Industry?

Our data indicates that Amphastar Pharmaceuticals, Inc. has a market capitalization of US$901m, and total annual CEO compensation was reported as US$6.0m for the year to December 2020. That is, the compensation was roughly the same as last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$898k.

In comparison with other companies in the industry with market capitalizations ranging from US$400m to US$1.6b, the reported median CEO total compensation was US$2.5m. Hence, we can conclude that Jack Zhang is remunerated higher than the industry median. What's more, Jack Zhang holds US$39m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20202019Proportion (2020)
Salary US$898k US$898k 15%
Other US$5.1m US$5.1m 85%
Total CompensationUS$6.0m US$6.0m100%

Speaking on an industry level, nearly 28% of total compensation represents salary, while the remainder of 72% is other remuneration. Amphastar Pharmaceuticals pays a modest slice of remuneration through salary, as compared 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.

ceo-compensation
NasdaqGS:AMPH CEO Compensation June 1st 2021

A Look at Amphastar Pharmaceuticals, Inc.'s Growth Numbers

Amphastar Pharmaceuticals, Inc.'s earnings per share (EPS) grew 31% per year over the last three years. It achieved revenue growth of 13% 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. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Amphastar Pharmaceuticals, Inc. Been A Good Investment?

Amphastar Pharmaceuticals, Inc. has served shareholders reasonably well, with a total return of 14% over three years. 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, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 4 warning signs for Amphastar Pharmaceuticals that investors should be aware of in a dynamic business environment.

Switching gears from Amphastar Pharmaceuticals, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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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