Sam Kulkarni has been the CEO of CRISPR Therapeutics AG (NASDAQ:CRSP) since 2017, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for CRISPR Therapeutics.
How Does Total Compensation For Sam Kulkarni Compare With Other Companies In The Industry?
At the time of writing, our data shows that CRISPR Therapeutics AG has a market capitalization of US$5.6b, and reported total annual CEO compensation of US$16m for the year to December 2019. Notably, that's an increase of 67% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$550k.
On examining similar-sized companies in the industry with market capitalizations between US$4.0b and US$12b, we discovered that the median CEO total compensation of that group was US$6.6m. Hence, we can conclude that Sam Kulkarni is remunerated higher than the industry median. Moreover, Sam Kulkarni also holds US$13m worth of CRISPR Therapeutics stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, roughly 23% of total compensation represents salary and 77% is other remuneration. CRISPR Therapeutics has chosen to walk a path less trodden, opting to compensate its CEO with less of a traditional salary and more non-salary rewards over the last year. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
CRISPR Therapeutics AG's Growth
Over the past three years, CRISPR Therapeutics AG has seen its earnings per share (EPS) grow by 38% per year. Its revenue is up 7,884% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. 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 CRISPR Therapeutics AG Been A Good Investment?
Boasting a total shareholder return of 319% over three years, CRISPR Therapeutics AG has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
CRISPR Therapeutics primarily uses non-salary benefits to reward its CEO. As we touched on above, CRISPR Therapeutics AG is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, CRISPR Therapeutics has produced strong EPS growth and shareholder returns over the last three years. So, in acknowledgment of the overall excellent performance, we believe CEO compensation is appropriate. Given the strong history of shareholder returns, the shareholders are probably very happy with Sam's 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 did our research and spotted 3 warning signs for CRISPR Therapeutics that investors should look into moving forward.
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.