Shareholders Will Probably Hold Off On Increasing Ultragenyx Pharmaceutical Inc.'s (NASDAQ:RARE) CEO Compensation For The Time Being

Key Insights

• Ultragenyx Pharmaceutical's Annual General Meeting to take place on 15th of May
• Total pay for CEO Emil Kakkis includes US$856.0k salary
• The total compensation is 33% higher than the average for the industry
• Over the past three years, Ultragenyx Pharmaceutical's EPS grew by 11% and over the past three years, the total loss to shareholders 34%

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The underwhelming share price performance of Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE) in the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 15th of May. They could also influence management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Ultragenyx Pharmaceutical

How Does Total Compensation For Emil Kakkis Compare With Other Companies In The Industry?

Our data indicates that Ultragenyx Pharmaceutical Inc. has a market capitalization of US$3.3b, and total annual CEO compensation was reported as US$14m for the year to December 2024. That's a modest increase of 4.9% on the prior year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$856k.

On comparing similar companies from the American Biotechs industry with market caps ranging from US$2.0b to US$6.4b, we found that the median CEO total compensation was US$10m. Hence, we can conclude that Emil Kakkis is remunerated higher than the industry median. Furthermore, Emil Kakkis directly owns US$90m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 22% of total compensation represents salary, while the remainder of 78% is other remuneration. Ultragenyx Pharmaceutical pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Ultragenyx Pharmaceutical Inc.'s Growth Numbers

Ultragenyx Pharmaceutical Inc. has seen its earnings per share (EPS) increase by 11% a year over the past three years. In the last year, its revenue is up 33%.

This demonstrates that the company has been improving recently and is good news for the shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Ultragenyx Pharmaceutical Inc. Been A Good Investment?

With a total shareholder return of -34% over three years, Ultragenyx Pharmaceutical Inc. shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would be keen to know what's holding the stock back when earnings have grown. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

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 Ultragenyx Pharmaceutical that investors should think about before committing capital to this stock.

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.

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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.