Shareholders May Be More Conservative With Arrowhead Pharmaceuticals, Inc.'s (NASDAQ:ARWR) CEO Compensation For Now

Key Insights

• Arrowhead Pharmaceuticals' Annual General Meeting to take place on 16th of March
• CEO Chris Anzalone's total compensation includes salary of US$863.4k
• Total compensation is 47% above industry average
• Arrowhead Pharmaceuticals' EPS declined by 59% over the past three years while total shareholder return over the past three years was 5.4%

Under the guidance of CEO Chris Anzalone, Arrowhead Pharmaceuticals, Inc. (NASDAQ:ARWR) 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 16th of March. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for Arrowhead Pharmaceuticals

Comparing Arrowhead Pharmaceuticals, Inc.'s CEO Compensation With The Industry

At the time of writing, our data shows that Arrowhead Pharmaceuticals, Inc. has a market capitalization of US$3.0b, and reported total annual CEO compensation of US$12m for the year to September 2022. We note that's a decrease of 51% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$863k.

On examining similar-sized companies in the American Biotechs industry with market capitalizations between US$2.0b and US$6.4b, we discovered that the median CEO total compensation of that group was US$8.2m. Hence, we can conclude that Chris Anzalone is remunerated higher than the industry median. Furthermore, Chris Anzalone directly owns US$54m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2022	2021	Proportion (2022)
Salary	US$863k	US$837k	7%
Other	US$11m	US$24m	93%
Total Compensation	US$12m	US$25m	100%

On an industry level, around 15% of total compensation represents salary and 85% is other remuneration. It's interesting to note that Arrowhead Pharmaceuticals 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 Arrowhead Pharmaceuticals, Inc.'s Growth Numbers

Arrowhead Pharmaceuticals, Inc. has reduced its earnings per share by 59% a year over the last three years. It achieved revenue growth of 93% over the last year.

Investors would be a bit wary of companies that have lower EPS But on the other hand, revenue growth is strong, suggesting a brighter future. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Arrowhead Pharmaceuticals, Inc. Been A Good Investment?

Arrowhead Pharmaceuticals, Inc. has not done too badly by shareholders, with a total return of 5.4%, over three years. It would be nice to see that metric improve in the future. Accordingly, a proposal to increase CEO remuneration without seeing an improvement in shareholder returns might not be met favorably by most shareholders.

In Summary...

Some shareholders will be pleased by the relatively good results, however, the results could still be improved. EPS growth is still weak, and until that picks up, shareholders may find it hard to approve a pay rise for the CEO, since they are already paid above the average in their industry.

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 Arrowhead Pharmaceuticals that investors should look into moving forward.

Important note: Arrowhead Pharmaceuticals is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.