Yahoo Finance Does Arrowhead Pharmaceuticals, Inc.’s (NASDAQ:ARWR) CEO Salary Reflect Performance?
Chris Anzalone became the CEO of Arrowhead Pharmaceuticals, Inc. (NASDAQ:ARWR) in 2007. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for Arrowhead Pharmaceuticals
How Does Chris Anzalone’s Compensation Compare With Similar Sized Companies?
According to our data, Arrowhead Pharmaceuticals, Inc. has a market capitalization of US$1.7b, and pays its CEO total annual compensation worth US$1.6m. (This number is for the twelve months until September 2018). That’s below the compensation, last year. While we always look at total compensation first, we note that the salary component is less, at US$643k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$3.5m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
The graphic below shows how CEO compensation at Arrowhead Pharmaceuticals has changed from year to year.
Is Arrowhead Pharmaceuticals, Inc. Growing?
Arrowhead Pharmaceuticals, Inc. has increased its earnings per share (EPS) by an average of 44% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 55%.
This shows that the company has improved itself over the last few years. Good news for shareholders. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. You might want to check this free visual report on analyst forecasts for future earnings.
Has Arrowhead Pharmaceuticals, Inc. Been A Good Investment?
Boasting a total shareholder return of 302% over three years, Arrowhead Pharmaceuticals, Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary…
It looks like Arrowhead Pharmaceuticals, Inc. pays its CEO less than similar sized companies. Considering the underlying business is growing earnings, this would suggest the pay is modest. And given most shareholders are probably very happy with recent returns, you might even think that Chris Anzalone deserves a raise!
It is relatively rare to see a modestly paid CEO when performance is so impressive. The cherry on top would be if company insiders are buying shares with their own money. Whatever your view on compensation, you might want to check if insiders are buying or selling Arrowhead Pharmaceuticals shares (free trial).
Important note: Arrowhead Pharmaceuticals may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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