Yahoo Finance Increases to CEO Compensation Might Be Put On Hold For Now at Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE)
Key Insights
Ultragenyx Pharmaceutical will host its Annual General Meeting on 18th of June
CEO Emil Kakkis' total compensation includes salary of US$823.7k
The total compensation is 56% higher than the average for the industry
Ultragenyx Pharmaceutical's EPS declined by 22% over the past three years while total shareholder loss over the past three years was 54%
In the past three years, the share price of Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE) has struggled to grow and now shareholders are sitting on a loss. Per share earnings growth is also lacking, despite revenue growth. In light of this performance, shareholders will have a chance to question the board in the upcoming AGM on 18th of June, where they can impact on future company performance by voting on resolutions, including executive compensation. Here's our take on why we think shareholders might be hesitant about approving a raise at the moment.
View our latest analysis for Ultragenyx Pharmaceutical
How Does Total Compensation For Emil Kakkis Compare With Other Companies In The Industry?
According to our data, Ultragenyx Pharmaceutical Inc. has a market capitalization of US$3.4b, and paid its CEO total annual compensation worth US$13m over the year to December 2023. That's a modest increase of 7.7% on the prior year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$824k.
For comparison, other companies in the American Biotechs industry with market capitalizations ranging between US$2.0b and US$6.4b had a median total CEO compensation of US$8.4m. Hence, we can conclude that Emil Kakkis is remunerated higher than the industry median. Furthermore, Emil Kakkis directly owns US$98m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$824k | US$796k | 6% |
Other | US$12m | US$11m | 94% |
Total Compensation | US$13m | US$12m | 100% |
Speaking on an industry level, nearly 23% of total compensation represents salary, while the remainder of 77% is other remuneration. It's interesting to note that Ultragenyx Pharmaceutical allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Ultragenyx Pharmaceutical Inc.'s Growth
Over the last three years, Ultragenyx Pharmaceutical Inc. has shrunk its earnings per share by 22% per year. Its revenue is up 15% over the last year.
The reduction in EPS, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 Ultragenyx Pharmaceutical Inc. Been A Good Investment?
Few Ultragenyx Pharmaceutical Inc. shareholders would feel satisfied with the return of -54% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
The returns to shareholders is disappointing along with lack of earnings growth, which goes some way in explaining the poor returns. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 3 warning signs for Ultragenyx Pharmaceutical (of which 1 is significant!) that you should know about in order to have a holistic understanding of the stock.
Important note: Ultragenyx Pharmaceutical is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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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.
