Yahoo Finance We Think Shareholders Are Less Likely To Approve A Pay Rise For Incyte Corporation's (NASDAQ:INCY) CEO For Now
Key Insights
Incyte will host its Annual General Meeting on 12th of June
Total pay for CEO Herve Hoppenot includes US$1.29m salary
Total compensation is similar to the industry average
Over the past three years, Incyte's EPS grew by 15% and over the past three years, the total loss to shareholders 32%
In the past three years, the share price of Incyte Corporation (NASDAQ:INCY) has struggled to grow and now shareholders are sitting on a loss. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 12th of June. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.
Check out our latest analysis for Incyte
How Does Total Compensation For Herve Hoppenot Compare With Other Companies In The Industry?
According to our data, Incyte Corporation has a market capitalization of US$13b, and paid its CEO total annual compensation worth US$17m over the year to December 2023. That's mostly flat as compared to the prior year's compensation. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.3m.
On comparing similar companies in the American Biotechs industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$17m. This suggests that Incyte remunerates its CEO largely in line with the industry average. Furthermore, Herve Hoppenot directly owns US$20m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$1.3m | US$1.2m | 8% |
Other | US$15m | US$15m | 92% |
Total Compensation | US$17m | US$17m | 100% |
Talking in terms of the industry, salary represented approximately 23% of total compensation out of all the companies we analyzed, while other remuneration made up 77% of the pie. It's interesting to note that Incyte allocates a smaller portion of compensation to salary 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.
Incyte Corporation's Growth
Over the past three years, Incyte Corporation has seen its earnings per share (EPS) grow by 15% per year. It achieved revenue growth of 8.6% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. 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 Incyte Corporation Been A Good Investment?
The return of -32% over three years would not have pleased Incyte Corporation shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would be keen to know what's holding the stock back when earnings have grown. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.
Whatever your view on compensation, you might want to check if insiders are buying or selling Incyte shares (free trial).
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.
