Stuart Peltz has been the CEO of PTC Therapeutics, Inc. (NASDAQ:PTCT) since 1998, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Comparing PTC Therapeutics, Inc.'s CEO Compensation With the industry
Our data indicates that PTC Therapeutics, Inc. has a market capitalization of US$3.1b, and total annual CEO compensation was reported as US$7.8m for the year to December 2019. That's a notable increase of 93% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$702k.
In comparison with other companies in the industry with market capitalizations ranging from US$2.0b to US$6.4b, the reported median CEO total compensation was US$7.2m. So it looks like Therapeutics compensates Stuart Peltz in line with the median for the industry. What's more, Stuart Peltz holds US$1.9m worth of shares in the company in their own name.
Talking in terms of the industry, salary represented approximately 23% of total compensation out of all the companies we analyzed, while other remuneration made up 77% 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.
PTC Therapeutics, Inc.'s Growth
Over the last three years, PTC Therapeutics, Inc. has shrunk its earnings per share by 20% per year. It achieved revenue growth of 23% over the last year.
The decrease in earnings could be a concern for some investors. But on the other hand, revenue growth is strong, suggesting a brighter future. In conclusion we can't form a strong opinion about business performance yet; but it's one 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?
We think that the total shareholder return of 149%, over three years, would leave most PTC Therapeutics, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
As previously discussed, Stuart is compensated close to the median for companies of its size, and which belong to the same industry. Investors will be happy that Therapeutics has produced strong shareholder returns for the past three years. Revenues have also showed some positive momentum, recently. On a worrying note, its important to acknowledge that EPS growth has been negative recently. Overall, the company's performance hasn't been that disappointing for us to object the CEO compensation.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Therapeutics that you should be aware of before investing.
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. 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.
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