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 18th of June
• CEO Emil Kakkis' total compensation includes salary of US$823.7k
• The total compensation is 59% higher than the average for the industry
• Ultragenyx Pharmaceutical's EPS declined by 22% over the past three years while total shareholder loss over the past three years was 59%

In the past three years, the share price of Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE) has struggled to grow and now shareholders are sitting on a loss. In addition, the company's per-share earnings growth is not looking good, despite growing revenues. The AGM coming up on 18th of June will be an opportunity for shareholders to have their concerns addressed by the board and for them to exercise their influence on management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders might be hesitant about approving a raise at the moment.

See our latest analysis for Ultragenyx Pharmaceutical

Comparing Ultragenyx Pharmaceutical Inc.'s CEO Compensation With The Industry

According to our data, Ultragenyx Pharmaceutical Inc. has a market capitalization of US$3.5b, and paid its CEO total annual compensation worth US$13m over the year to December 2023. That's a modest increase of 7.7% on the prior year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$824k.

On examining similar-sized companies in the American Biotechs industry with market capitalizations between US$2.0b and US$6.4b, we discovered that the median CEO total compensation of that group was US$8.2m. This suggests that Emil Kakkis is paid more than the median for the industry. Moreover, Emil Kakkis also holds US$91m worth of Ultragenyx Pharmaceutical stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	US$824k	US$796k	6%
Other	US$12m	US$11m	94%
Total Compensation	US$13m	US$12m	100%

On an industry level, around 23% of total compensation represents salary and 77% is other remuneration. In Ultragenyx Pharmaceutical's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Ultragenyx Pharmaceutical Inc.'s Growth Numbers

Over the last three years, Ultragenyx Pharmaceutical Inc. has shrunk its earnings per share by 22% per year. In the last year, its revenue is up 15%.

The decrease in EPS could be a concern for some investors. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Ultragenyx Pharmaceutical Inc. Been A Good Investment?

The return of -59% over three years would not have pleased Ultragenyx Pharmaceutical Inc. shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

The company's earnings haven't grown and possibly because of that, the stock has performed poorly, resulting in a loss for the company's shareholders. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 3 warning signs for Ultragenyx Pharmaceutical you should be aware of, and 1 of them is a bit concerning.

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. 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.