Is Eagle Pharmaceuticals, Inc.’s (NASDAQ:EGRX) CEO Paid Enough Relative To Peers?

Scott Tarriff became the CEO of Eagle Pharmaceuticals, Inc. (NASDAQ:EGRX) in 2007. First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Eagle Pharmaceuticals

How Does Scott Tarriff’s Compensation Compare With Similar Sized Companies?

According to our data, Eagle Pharmaceuticals, Inc. has a market capitalization of US$662m, and pays its CEO total annual compensation worth US$8.0m. (This number is for the twelve months until December 2017). While we always look at total compensation first, we note that the salary component is less, at US$747k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$400m to US$1.6b. The median total CEO compensation was US$2.3m.

As you can see, Scott Tarriff is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Eagle Pharmaceuticals, Inc. is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see, below, how CEO compensation at Eagle Pharmaceuticals has changed over time.

NasdaqGM:EGRX CEO Compensation, April 16th 2019
NasdaqGM:EGRX CEO Compensation, April 16th 2019

Is Eagle Pharmaceuticals, Inc. Growing?

Eagle Pharmaceuticals, Inc. has increased its earnings per share (EPS) by an average of 23% a year, over the last three years (using a line of best fit). Its revenue is down -9.9% over last year.

This demonstrates that the company has been improving recently. A good result. While it would be good to see revenue growth, profits matter more in the end. It could be important to check this free visual depiction of what analysts expect for the future.

Has Eagle Pharmaceuticals, Inc. Been A Good Investment?

Eagle Pharmaceuticals, Inc. has served shareholders reasonably well, with a total return of 28% 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…

We compared total CEO remuneration at Eagle Pharmaceuticals, Inc. with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. We also think investors are doing ok, over the same time period. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn’t call the CEO pay problematic. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Eagle Pharmaceuticals (free visualization of insider trades).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.