Stock Analysis

Increases to Infinity Pharmaceuticals, Inc.'s (NASDAQ:INFI) CEO Compensation Might Cool off for now

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Performance at Infinity Pharmaceuticals, Inc. (NASDAQ:INFI) has been reasonably good and CEO Adelene Perkins has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 10 June 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders will still be cautious of paying the CEO excessively.

Check out our latest analysis for Infinity Pharmaceuticals

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$292m, and paid its CEO total annual compensation worth US$2.7m over the year to December 2020. Notably, that's an increase of 63% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$690k.

On comparing similar companies from the same industry with market caps ranging from US$100m to US$400m, we found that the median CEO total compensation was US$1.7m. This suggests that Adelene Perkins is paid more than the median for the industry. What's more, Adelene Perkins holds US$2.7m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20202019Proportion (2020)
Salary US$690k US$690k 25%
Other US$2.1m US$991k 75%
Total CompensationUS$2.7m US$1.7m100%

On an industry level, roughly 20% of total compensation represents salary and 80% is other remuneration. Infinity Pharmaceuticals is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

NasdaqGS:INFI CEO Compensation June 3rd 2021

A Look at Infinity Pharmaceuticals, Inc.'s Growth Numbers

Infinity Pharmaceuticals, Inc. has reduced its earnings per share by 18% a year over the last three years. It achieved revenue growth of 32% over the last year.

The decrease in EPS could be a concern for some investors. On the other hand, the strong revenue growth suggests the business is growing. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Infinity Pharmaceuticals, Inc. Been A Good Investment?

Most shareholders would probably be pleased with Infinity Pharmaceuticals, Inc. for providing a total return of 68% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Some shareholders will be pleased by the relatively good results, however, the results could still be improved. We still think that some shareholders will be hesitant of increasing CEO pay until EPS growth improves, since they are already paid higher than the industry.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 3 warning signs for Infinity Pharmaceuticals (of which 1 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Important note: Infinity Pharmaceuticals 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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