Yahoo Finance It Looks Like Arvinas, Inc.'s (NASDAQ:ARVN) CEO May Expect Their Salary To Be Put Under The Microscope
Key Insights
Arvinas' Annual General Meeting to take place on 29th of May
CEO John Houston's total compensation includes salary of US$657.7k
The total compensation is similar to the average for the industry
Over the past three years, Arvinas' EPS fell by 21% and over the past three years, the total loss to shareholders 48%
Arvinas, Inc. (NASDAQ:ARVN) has not performed well recently and CEO John Houston will probably need to up their game. At the upcoming AGM on 29th of May, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.
View our latest analysis for Arvinas
Comparing Arvinas, Inc.'s CEO Compensation With The Industry
Our data indicates that Arvinas, Inc. has a market capitalization of US$2.5b, and total annual CEO compensation was reported as US$7.6m for the year to December 2023. Notably, that's a decrease of 20% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$658k.
On examining similar-sized companies in the American Pharmaceuticals 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$7.6m. From this we gather that John Houston is paid around the median for CEOs in the industry. What's more, John Houston holds US$31m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$658k | US$632k | 9% |
Other | US$7.0m | US$8.9m | 91% |
Total Compensation | US$7.6m | US$9.5m | 100% |
Speaking on an industry level, nearly 29% of total compensation represents salary, while the remainder of 71% is other remuneration. In Arvinas' case, non-salary compensation represents a greater slice of total remuneration, in comparison 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 Arvinas, Inc.'s Growth Numbers
Over the last three years, Arvinas, Inc. has shrunk its earnings per share by 21% per year. It saw its revenue drop 48% over the last year.
Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Arvinas, Inc. Been A Good Investment?
Few Arvinas, Inc. shareholders would feel satisfied with the return of -48% over three years. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 2 warning signs for Arvinas that investors should be aware of in a dynamic business environment.
Switching gears from Arvinas, 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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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.
