Sam Kulkarni has been the CEO of CRISPR Therapeutics AG (NASDAQ:CRSP) since 2017, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
How Does Total Compensation For Sam Kulkarni Compare With Other Companies In The Industry?
At the time of writing, our data shows that CRISPR Therapeutics AG has a market capitalization of US$7.0b, and reported total annual CEO compensation of US$16m for the year to December 2019. We note that's an increase of 67% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$550k.
In comparison with other companies in the industry with market capitalizations ranging from US$4.0b to US$12b, the reported median CEO total compensation was US$7.8m. Hence, we can conclude that Sam Kulkarni is remunerated higher than the industry median. Moreover, Sam Kulkarni also holds US$16m worth of CRISPR Therapeutics stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, roughly 24% of total compensation represents salary and 76% is other remuneration. CRISPR Therapeutics has chosen to walk a path less trodden, opting to compensate its CEO with less of a traditional salary and more non-salary rewards over the last year. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
CRISPR Therapeutics AG's Growth
Over the past three years, CRISPR Therapeutics AG has seen its earnings per share (EPS) grow by 24% per year. It saw its revenue drop 64% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has CRISPR Therapeutics AG Been A Good Investment?
We think that the total shareholder return of 459%, over three years, would leave most CRISPR Therapeutics AG shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
CRISPR Therapeutics primarily uses non-salary benefits to reward its CEO. As previously discussed, Sam is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, CRISPR Therapeutics has produced strong EPS growth and shareholder returns over the last three years. As a result of the excellent all-round performance of the company, we believe CEO compensation is fair. Given the strong history of shareholder returns, the shareholders are probably very happy with Sam's performance.
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. We did our research and spotted 2 warning signs for CRISPR Therapeutics that investors should look into moving forward.
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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