Stock Analysis

We Think Some Shareholders May Hesitate To Increase PTC Therapeutics, Inc.'s (NASDAQ:PTCT) CEO Compensation

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Under the guidance of CEO Stuart Peltz, PTC Therapeutics, Inc. (NASDAQ:PTCT) has performed reasonably well recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 08 June 2021. However, some shareholders may still want to keep CEO compensation within reason.

See our latest analysis for Therapeutics

Comparing PTC Therapeutics, Inc.'s CEO Compensation With the industry

Our data indicates that PTC Therapeutics, Inc. has a market capitalization of US$2.7b, and total annual CEO compensation was reported as US$11m for the year to December 2020. We note that's an increase of 36% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$742k.

For comparison, other companies in the same industry with market capitalizations ranging between US$2.0b and US$6.4b had a median total CEO compensation of US$6.7m. This suggests that Stuart Peltz is paid more than the median for the industry. Furthermore, Stuart Peltz directly owns US$1.4m worth of shares in the company.

Component20202019Proportion (2020)
Salary US$742k US$702k 7%
Other US$9.8m US$7.1m 93%
Total CompensationUS$11m US$7.8m100%

Talking in terms of the industry, salary represented approximately 19% of total compensation out of all the companies we analyzed, while other remuneration made up 81% of the pie. Therapeutics sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

NasdaqGS:PTCT CEO Compensation June 2nd 2021

PTC Therapeutics, Inc.'s Growth

PTC Therapeutics, Inc. has reduced its earnings per share by 47% a year over the last three years. In the last year, its revenue is up 34%.

Investors would be a bit wary of companies that have lower EPS On the other hand, the strong revenue growth suggests the business is growing. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has PTC Therapeutics, Inc. Been A Good Investment?

PTC Therapeutics, Inc. has generated a total shareholder return of 7.1% over three years, so most shareholders wouldn't be too disappointed. Although, there's always room to improve. Accordingly, a proposal to increase CEO remuneration without seeing an improvement in shareholder returns might not be met favorably by most shareholders.

In Summary...

The overall company performance has been commendable, however there are still areas for improvement. We still think that some shareholders will be hesitant of increasing CEO pay until EPS growth improves, since they are already paid higher than the industry.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 4 warning signs for Therapeutics that investors should think about before committing capital to this stock.

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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