Here's Why Shareholders Should Examine Jazz Pharmaceuticals plc's (NASDAQ:JAZZ) CEO Compensation Package More Closely

Key Insights

• Jazz Pharmaceuticals to hold its Annual General Meeting on 25th of July
• CEO Bruce Cozadd's total compensation includes salary of US$1.20m
• The overall pay is 52% above the industry average
• Jazz Pharmaceuticals' three-year loss to shareholders was 39% while its EPS was down 17% over the past three years

Shareholders will probably not be too impressed with the underwhelming results at Jazz Pharmaceuticals plc (NASDAQ:JAZZ) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 25th of July. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. From our analysis, we think CEO compensation may need a review in light of the recent performance.

View our latest analysis for Jazz Pharmaceuticals

Comparing Jazz Pharmaceuticals plc's CEO Compensation With The Industry

At the time of writing, our data shows that Jazz Pharmaceuticals plc has a market capitalization of US$6.7b, and reported total annual CEO compensation of US$15m for the year to December 2023. We note that's a decrease of 11% compared to last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.2m.

For comparison, other companies in the American Pharmaceuticals industry with market capitalizations ranging between US$4.0b and US$12b had a median total CEO compensation of US$10m. This suggests that Bruce Cozadd is paid more than the median for the industry. Furthermore, Bruce Cozadd directly owns US$34m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	US$1.2m	US$1.2m	8%
Other	US$14m	US$16m	92%
Total Compensation	US$15m	US$17m	100%

Talking in terms of the industry, salary represented approximately 28% of total compensation out of all the companies we analyzed, while other remuneration made up 72% of the pie. Jazz Pharmaceuticals pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Jazz Pharmaceuticals plc's Growth Numbers

Jazz Pharmaceuticals plc has reduced its earnings per share by 17% a year over the last three years. Its revenue is up 2.8% over the last year.

Overall this is not a very positive result for shareholders. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Jazz Pharmaceuticals plc Been A Good Investment?

Few Jazz Pharmaceuticals plc shareholders would feel satisfied with the return of -39% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 3 warning signs for Jazz Pharmaceuticals (1 is a bit concerning!) that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com