In 2007 Howard Robin was appointed CEO of Nektar Therapeutics (NASDAQ:NKTR). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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 Howard Robin’s Compensation Compare With Similar Sized Companies?
According to our data, Nektar Therapeutics has a market capitalization of US$4.0b, and paid its CEO total annual compensation worth US$13m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$969k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We looked at a group of companies with market capitalizations from US$2.0b to US$6.4b, and the median CEO total compensation was US$4.9m.
It would therefore appear that Nektar Therapeutics pays Howard Robin more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see a visual representation of the CEO compensation at Nektar Therapeutics, below.
Is Nektar Therapeutics Growing?
On average over the last three years, Nektar Therapeutics has grown earnings per share (EPS) by 38% each year (using a line of best fit). In the last year, its revenue is down 90%.
This demonstrates that the company has been improving recently. A good result. While it would be good to see revenue growth, profits matter more in the end. It could be important to check this free visual depiction of what analysts expect for the future.
Has Nektar Therapeutics Been A Good Investment?
I think that the total shareholder return of 71%, over three years, would leave most Nektar Therapeutics shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We examined the amount Nektar Therapeutics pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. On top of that, in the same period, returns to shareholders have been great. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Nektar Therapeutics (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.
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