Stock Analysis

Shareholders Will Most Likely Find Incyte Corporation's (NASDAQ:INCY) CEO Compensation Acceptable

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CEO Herve Hoppenot has done a decent job of delivering relatively good performance at Incyte Corporation (NASDAQ:INCY) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 26 May 2021. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.

Check out our latest analysis for Incyte

Comparing Incyte Corporation's CEO Compensation With the industry

At the time of writing, our data shows that Incyte Corporation has a market capitalization of US$18b, and reported total annual CEO compensation of US$16m for the year to December 2020. We note that's an increase of 8.1% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.1m.

In comparison with other companies in the industry with market capitalizations over US$8.0b , the reported median total CEO compensation was US$18m. From this we gather that Herve Hoppenot is paid around the median for CEOs in the industry. Furthermore, Herve Hoppenot directly owns US$19m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20202019Proportion (2020)
Salary US$1.1m US$1.0m 7%
Other US$15m US$14m 93%
Total CompensationUS$16m US$15m100%

On an industry level, roughly 19% of total compensation represents salary and 81% is other remuneration. It's interesting to note that Incyte allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

NasdaqGS:INCY CEO Compensation May 20th 2021

A Look at Incyte Corporation's Growth Numbers

Incyte Corporation saw earnings per share stay pretty flat over the last three years. It achieved revenue growth of 21% over the last year.

This revenue growth could really point to a brighter future. And the modest growth in EPS isn't bad, either. So while performance isn't amazing, we think it really does seem quite respectable. 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 Incyte Corporation Been A Good Investment?

With a total shareholder return of 23% over three years, Incyte Corporation shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. In saying that, any proposed increase to CEO compensation will still be assessed on how reasonable it is based on performance and industry benchmarks.

Whatever your view on compensation, you might want to check if insiders are buying or selling Incyte shares (free trial).

Important note: Incyte 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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