It's Probably Less Likely That Incyte Corporation's (NASDAQ:INCY) CEO Will See A Huge Pay Rise This Year

Key Insights

• Incyte to hold its Annual General Meeting on 12th of June
• CEO Herve Hoppenot's total compensation includes salary of US$1.29m
• The total compensation is similar to the average for the industry
• Incyte's three-year loss to shareholders was 32% while its EPS grew by 15% over the past three years

In the past three years, the share price of Incyte Corporation (NASDAQ:INCY) has struggled to grow and now shareholders are sitting on a loss. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 12th of June. They could also influence management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Incyte

How Does Total Compensation For Herve Hoppenot Compare With Other Companies In The Industry?

Our data indicates that Incyte Corporation has a market capitalization of US$13b, and total annual CEO compensation was reported as US$17m for the year to December 2023. That is, the compensation was roughly the same as last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.3m.

On comparing similar companies in the American Biotechs industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$17m. This suggests that Incyte remunerates its CEO largely in line with the industry average. Moreover, Herve Hoppenot also holds US$20m worth of Incyte stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	US$1.3m	US$1.2m	8%
Other	US$15m	US$15m	92%
Total Compensation	US$17m	US$17m	100%

Talking in terms of the industry, salary represented approximately 23% of total compensation out of all the companies we analyzed, while other remuneration made up 77% of the pie. Incyte pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Incyte Corporation's Growth

Incyte Corporation's earnings per share (EPS) grew 15% per year over the last three years. In the last year, its revenue is up 8.6%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Incyte Corporation Been A Good Investment?

With a total shareholder return of -32% over three years, Incyte Corporation shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

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. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Incyte (free visualization of insider trades).

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.