Here's Why Shareholders May Want To Be Cautious With Increasing Amicus Therapeutics, Inc.'s (NASDAQ:FOLD) CEO Pay Packet

By
Simply Wall St
Published
June 03, 2021
NasdaqGM:FOLD
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In the past three years, the share price of Amicus Therapeutics, Inc. (NASDAQ:FOLD) has struggled to grow and now shareholders are sitting on a loss. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 10 June 2021. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

Check out our latest analysis for Amicus Therapeutics

Comparing Amicus Therapeutics, Inc.'s CEO Compensation With the industry

According to our data, Amicus Therapeutics, Inc. has a market capitalization of US$2.5b, and paid its CEO total annual compensation worth US$11m over the year to December 2020. That's a notable increase of 15% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$720k.

In comparison with other companies in the industry with market capitalizations ranging from US$2.0b to US$6.4b, the reported median CEO total compensation was US$6.7m. Hence, we can conclude that John Crowley is remunerated higher than the industry median. Furthermore, John Crowley directly owns US$9.0m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20202019Proportion (2020)
Salary US$720k US$657k 6%
Other US$11m US$9.2m 94%
Total CompensationUS$11m US$9.9m100%

Talking in terms of the industry, salary represented approximately 20% of total compensation out of all the companies we analyzed, while other remuneration made up 80% of the pie. In Amicus Therapeutics' case, non-salary compensation represents a greater slice of total remuneration, 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.

ceo-compensation
NasdaqGM:FOLD CEO Compensation June 3rd 2021

A Look at Amicus Therapeutics, Inc.'s Growth Numbers

Amicus Therapeutics, Inc. has seen its earnings per share (EPS) increase by 22% a year over the past three years. Its revenue is up 28% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Amicus Therapeutics, Inc. Been A Good Investment?

With a total shareholder return of -41% over three years, Amicus Therapeutics, Inc. shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for Amicus Therapeutics that you should be aware of before investing.

Important note: Amicus Therapeutics 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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