Adelene Perkins became the CEO of Infinity Pharmaceuticals, Inc. (NASDAQ:INFI) in 2010, and we think it’s a good time to look at the executive’s compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
How Does Total Compensation For Adelene Perkins Compare With Other Companies In The Industry?
According to our data, Infinity Pharmaceuticals, Inc. has a market capitalization of US$54m, and paid its CEO total annual compensation worth US$1.7m over the year to December 2019. Notably, that’s a decrease of 31% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$690k.
On comparing similar-sized companies in the industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$1.1m. Hence, we can conclude that Adelene Perkins is remunerated higher than the industry median. What’s more, Adelene Perkins holds US$785k worth of shares in the company in their own name.
On an industry level, around 23% of total compensation represents salary and 77% is other remuneration. It’s interesting to note that Infinity Pharmaceuticals pays out a greater portion of remuneration through salary, compared to the industry. It’s important to note that a slant towards non-salary compensation suggests that total pay is tied to the company’s performance.
Infinity Pharmaceuticals, Inc.’s Growth
Infinity Pharmaceuticals, Inc. has seen its earnings per share (EPS) increase by 20% a year over the past three years. Its revenue is down 94% over the previous year.
This demonstrates that the company has been improving recently and is good news for the shareholders. It’s always a tough situation when revenues are not growing, but ultimately profits are more important. 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 Infinity Pharmaceuticals, Inc. Been A Good Investment?
Given the total shareholder loss of 18% over three years, many shareholders in Infinity Pharmaceuticals, Inc. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
As we noted earlier, Infinity Pharmaceuticals pays its CEO higher than the norm for similar-sized companies belonging to the same industry. However, we must not forget that the EPS growth has been very strong, but we cannot say the same about the uninspiring shareholder returns (over the last three years). Although we’d stop short of calling it inappropriate, we think Adelene is earning a very handsome sum.
CEO compensation can have a massive impact on performance, but it’s just one element. We’ve identified 4 warning signs for Infinity Pharmaceuticals that investors should be aware of in a dynamic business environment.
Switching gears from Infinity Pharmaceuticals, if you’re hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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. 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.
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