Patrick Soon-Shiong became the CEO of NantKwest, Inc. (NASDAQ:NK) in 2015. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
Check out our latest analysis for NantKwest
How Does Patrick Soon-Shiong's Compensation Compare With Similar Sized Companies?
According to our data, NantKwest, Inc. has a market capitalization of US$358m, and paid its CEO total annual compensation worth US$320k over the year to December 2019. That's below the compensation, last year. It is worth noting that the CEO compensation consists almost entirely of the salary, worth US$320k. We looked at a group of companies with market capitalizations from US$200m to US$800m, and the median CEO total compensation was US$2.3m.
Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of NantKwest. Talking in terms of the sector, salary represented approximately 23% of total compensation out of all the companies we analysed, while other remuneration made up 77% of the pie. At the company level, NantKwest pays Patrick Soon-Shiong solely through a salary, preferring to go down a conventional route.
Most shareholders would consider it a positive that Patrick Soon-Shiong takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion. You can see a visual representation of the CEO compensation at NantKwest, below.
Is NantKwest, Inc. Growing?
On average over the last three years, NantKwest, Inc. has seen earnings per share (EPS) move in a favourable direction by 18% each year (using a line of best fit). Its revenue is down 8.5% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. While it would be good to see revenue growth, profits matter more in the end. Shareholders might be interested in this free visualization of analyst forecasts.
Has NantKwest, Inc. Been A Good Investment?
With a total shareholder return of 24% over three years, NantKwest, Inc. shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
In Summary...
NantKwest, Inc. is currently paying its CEO below what is normal for companies of its size.
Since the business is growing, many would argue this suggests the pay is modest. The total shareholder return might not be amazing, but that doesn't mean that Patrick Soon-Shiong is paid too much. It's good to see reasonable payment of the CEO, even while the business improves. It would be an additional positive if insiders are buying shares. Shifting gears from CEO pay for a second, we've spotted 6 warning signs for NantKwest you should be aware of, and 3 of them don't sit too well with us.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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.
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. Thank you for reading.
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