Does Incyte's (NASDAQ:INCY) CEO Salary Compare Well With Industry Peers?

Hervé Hoppenot became the CEO of Incyte Corporation (NASDAQ:INCY) in 2014, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Incyte.

See our latest analysis for Incyte

How Does Total Compensation For Hervé Hoppenot Compare With Other Companies In The Industry?

According to our data, Incyte Corporation has a market capitalization of US$22b, and paid its CEO total annual compensation worth US$15m over the year to December 2019. Notably, that's an increase of 63% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.0m.

On comparing similar companies in the industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$15m. This suggests that Incyte remunerates its CEO largely in line with the industry average. Furthermore, Hervé Hoppenot directly owns US$22m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, roughly 23% of total compensation represents salary and 77% is other remuneration. In Incyte's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Incyte Corporation's Growth

Incyte Corporation has seen its earnings per share (EPS) increase by 63% a year over the past three years. Its revenue is up 12% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. 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?

Given the total shareholder loss of 25% over three years, many shareholders in Incyte Corporation are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

As we noted earlier, Incyte pays its CEO in line with similar-sized companies belonging to the same industry. Meanwhile, shareholder returns paint a sorry picture for the company, finishing in the red over the last three years. However, earnings growth is positive over the same time frame. Considering positive earnings growth, we'd say compensation is fair, but shareholders may be wary of a bump in pay before the company logs positive returns.

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. That's why we did some digging and identified 1 warning sign for Incyte that you should be aware of before investing.

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.

This article by Simply Wall St is general in nature. 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.

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