Is Horizon Pharma Public Limited Company (NASDAQ:HZNP) Overpaying Its CEO?

In 2008 Tim Walbert was appointed CEO of Horizon Pharma Public Limited Company (NASDAQ:HZNP). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we’ll consider growth that the business demonstrates. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Horizon Pharma

How Does Tim Walbert’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Horizon Pharma Public Limited Company has a market cap of US$3.2b, and is paying total annual CEO compensation of US$2m. That’s just a smallish increase of 2.8% on last year. We examined companies with market caps from US$2.0b to US$6.4b, and discovered that the median CEO compensation of that group was US$5m.

Most shareholders would consider it a positive that Tim Walbert takes less compensation than the CEOs of most similar size companies, leaving more for shareholders. While this is a good thing, you’ll need to understand the business better before you can form an opinion.

You can see, below, how CEO compensation at Horizon Pharma has changed over time.

NasdaqGS:HZNP CEO Compensation October 18th 18
NasdaqGS:HZNP CEO Compensation October 18th 18

Is Horizon Pharma Public Limited Company Growing?

Over the last three years Horizon Pharma Public Limited Company has shrunk its earnings per share by an average of 91% per year. It achieved revenue growth of 4.2% over the last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. And the modest revenue growth over 12 months isn’t much comfort against the reduced earnings per share. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO.

It could be important to check this free visual depiction of what analysts expect for the future.

Has Horizon Pharma Public Limited Company Been A Good Investment?

With a total shareholder return of 0.05% over three years, Horizon Pharma Public Limited Company has done okay by shareholders. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary…

It appears that Horizon Pharma Public Limited Company remunerates its CEO below most similar sized companies.

The compensation paid to Tim Walbert is lower than is usual at similar sized companies. But the company lacks earnings per share growth, and returns to shareholders are less than stellar. There is room for improved company performance, but we don’t see the CEO pay as a big issue here. Whatever your view on compensation, you might want to check if insiders are buying or selling Horizon Pharma Public Limited Company shares (free trial).

Or you could feast your eyes on this interactive graph depicting past earnings, cash flow and revenue.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.