Most Shareholders Will Probably Agree With Sarepta Therapeutics, Inc.'s (NASDAQ:SRPT) CEO Compensation

By
Simply Wall St
Published
May 27, 2021
NasdaqGS:SRPT
Source: Shutterstock

The performance at Sarepta Therapeutics, Inc. (NASDAQ:SRPT) has been rather lacklustre of late and shareholders may be wondering what CEO Doug Ingram is planning to do about this. At the next AGM coming up on 03 June 2021, they can influence managerial decision making through voting on resolutions, including executive remuneration. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

See our latest analysis for Sarepta Therapeutics

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

According to our data, Sarepta Therapeutics, Inc. has a market capitalization of US$6.0b, and paid its CEO total annual compensation worth US$1.3m over the year to December 2020. We note that's a small decrease of 6.9% on last year. In particular, the salary of US$669.3k, makes up a fairly large portion of the total compensation being paid to the CEO.

On examining similar-sized companies in the industry with market capitalizations between US$4.0b and US$12b, we discovered that the median CEO total compensation of that group was US$6.3m. That is to say, Doug Ingram is paid under the industry median. Moreover, Doug Ingram also holds US$27m worth of Sarepta Therapeutics stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20202019Proportion (2020)
Salary US$669k US$650k 52%
Other US$623k US$737k 48%
Total CompensationUS$1.3m US$1.4m100%

On an industry level, around 20% of total compensation represents salary and 80% is other remuneration. Sarepta Therapeutics is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

ceo-compensation
NasdaqGS:SRPT CEO Compensation May 27th 2021

Sarepta Therapeutics, Inc.'s Growth

Sarepta Therapeutics, Inc. has reduced its earnings per share by 27% a year over the last three years. It achieved revenue growth of 41% over the last year.

Investors would be a bit wary of companies that have lower EPS But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 Sarepta Therapeutics, Inc. Been A Good Investment?

Since shareholders would have lost about 20% over three years, some Sarepta Therapeutics, Inc. investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

The loss to shareholders over the past three years is certainly concerning. The downward trend in share price performance may be attributable to the the fact that earnings growth has gone backwards. The upcoming AGM will provide shareholders the opportunity to raise their concerns and evaluate if the board’s judgement and decision-making is aligned with their expectations.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for Sarepta Therapeutics that you should be aware of before investing.

Switching gears from Sarepta Therapeutics, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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