Yahoo Finance Does Allergan plc’s (NYSE:AGN) CEO Pay Compare Well With Peers?
Brent Saunders has been the CEO of Allergan plc (NYSE:AGN) since 2014. This analysis aims first to contrast CEO compensation with other large companies. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
View our latest analysis for Allergan
How Does Brent Saunders’s Compensation Compare With Similar Sized Companies?
Our data indicates that Allergan plc is worth US$54.5b, and total annual CEO compensation is US$33m. Notably, that’s an increase of 693% over the year before. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO compensation to be US$11m.
It would therefore appear that Allergan plc pays Brent Saunders more than the median CEO remuneration at large companies, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
The graphic below shows how CEO compensation at Allergan has changed from year to year.
Is Allergan plc Growing?
Allergan plc has increased its earnings per share (EPS) by an average of 19% a year, over the last three years Its revenue is up 3.6% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s nice to see a little revenue growth, as this is consistent with healthy business conditions.
You might want to check this free visual report on analyst forecasts for future earnings.
Has Allergan plc Been A Good Investment?
With a three year total loss of 47%, Allergan plc would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
In Summary…
We compared total CEO remuneration at Allergan plc with the amount paid at other large companies. Our data suggests that it pays above the median CEO pay within that group.
However, the earnings per share growth over three years is certainly impressive. Having said that, shareholders may be disappointed with the weak returns over the last three years. So shareholders might not feel great about the fact that CEO pay increased on last year. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Allergan plc (free visualization of insider trades).
Or you might prefer this data-rich interactive visualization of historic revenue and earnings.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
