NASDAQ:NVAX) in 2011, 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 evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.” data-reactid=”28″ type=”text”>Stan Erck became the CEO of Novavax, Inc. (NASDAQ:NVAX) in 2011, 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 evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
How Does Total Compensation For Stan Erck Compare With Other Companies In The Industry?
At the time of writing, our data shows that Novavax, Inc. has a market capitalization of US$5.4b, and reported total annual CEO compensation of US$2.4m for the year to December 2019. That’s a notable decrease of 41% on last year. While this analysis focuses on total compensation, it’s worth acknowledging that the salary portion is lower, valued at US$643k.
For comparison, other companies in the same industry with market capitalizations ranging between US$4.0b and US$12b had a median total CEO compensation of US$6.6m. Accordingly, Novavax pays its CEO under the industry median. What’s more, Stan Erck holds US$2.2m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
On an industry level, around 23% of total compensation represents salary and 77% is other remuneration. Novavax pays out 26% of remuneration in the form of a salary, significantly higher than the industry average. It’s important to note that a slant towards non-salary compensation suggests that total pay is tied to the company’s performance.
A Look at Novavax, Inc.’s Growth Numbers
Novavax, Inc. has seen its earnings per share (EPS) increase by 41% a year over the past three years. Its revenue is up 138% over the last year.
this free visual depiction of what analysts expect for the future.” data-reactid=”54″ type=”text”>Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. 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 Novavax, Inc. Been A Good Investment?
Boasting a total shareholder return of 378% over three years, Novavax, Inc. has done well by shareholders. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.
As previously discussed, Stan is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. Considering robust EPS growth, we believe Stan to be modestly paid. Plus, we can’t ignore the impressive shareholder returns, and won’t be surprised if some shareholders were to reward such excellent all-around performance with a raise.
2 warning signs for Novavax (of which 1 doesn’t sit too well with us!) that you should know about in order to have a holistic understanding of the stock.” data-reactid=”59″ type=”text”>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 2 warning signs for Novavax (of which 1 doesn’t sit too well with us!) that you should know about in order to have a holistic understanding of the stock.
list of high return, low debt companies is a great place to look.” data-reactid=”60″ type=”text”>Switching gears from Novavax, if you’re hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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.