Will Lewis became the CEO of Insmed Incorporated (NASDAQ:INSM) in 2012. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. 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$2.4b, and pays its CEO total annual compensation worth US$4.4m. (This figure is for the year to December 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$567k. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO total compensation was US$3.6m.
That means Will Lewis receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.
You can see, below, how CEO compensation at Insmed has changed over time.
Is Insmed Incorporated Growing?
Insmed Incorporated has reduced its earnings per share by an average of 23% a year, over the last three years (measured with a line of best fit). Its revenue is up 16% over last year.
Unfortunately, earnings per share have trended lower over the last three years. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.
Has Insmed Incorporated Been A Good Investment?
I think that the total shareholder return of 137%, over three years, would leave most Insmed Incorporated shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
Remuneration for Will Lewis is close enough to the median pay for a CEO of a similar sized company .
We feel that earnings per share have been a bit disappointing, but it’s nice to see positive shareholder returns over the last three years. So we doubt many are complaining about the fairly normal CEO pay. Shareholders may want to check for free if Insmed insiders are buying or selling shares.
Important note: Insmed may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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