Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
In 2012 Will Lewis was appointed CEO of Insmed Incorporated (NASDAQ:INSM). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Will Lewis’s Compensation Compare With Similar Sized Companies?
According to our data, Insmed Incorporated has a market capitalization of US$2.0b, and pays its CEO total annual compensation worth US$5.9m. (This number is for the twelve months until December 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$610k. We examined companies with market caps from US$1.0b to US$3.2b, and discovered that the median CEO total compensation of that group was US$3.9m.
Thus we can conclude that Will Lewis receives more in total compensation than the median of a group of companies in the same market, and of similar size to Insmed Incorporated. However, this doesn’t necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at Insmed has changed over time.
Is Insmed Incorporated Growing?
Over the last three years Insmed Incorporated has shrunk its earnings per share by an average of 23% per year (measured with a line of best fit). It achieved revenue growth of 260% over the last year.
As investors, we are a bit wary of companies that have lower earnings per share, over three years. But on the other hand, revenue growth is strong, suggesting a brighter future. These two metric are moving in different directions, so while it’s hard to be confident judging performance, we think the stock is worth watching.
Has Insmed Incorporated Been A Good Investment?
Most shareholders would probably be pleased with Insmed Incorporated for providing a total return of 99% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We compared the total CEO remuneration paid by Insmed Incorporated, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
One might like to have seen stronger growth, but shareholder returns have been pleasing, over the last three years. As a result of the juicy return to investors, the CEO remuneration may well be quite reasonable. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Insmed (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.