Here's Why We Think Intra-Cellular Therapies, Inc.'s (NASDAQ:ITCI) CEO Compensation Looks Fair for the time being

Performance at Intra-Cellular Therapies, Inc. (NASDAQ:ITCI) has been reasonably good and CEO Sharon Mates has done a decent job of steering the company in the right direction. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 21 June 2021. Here is our take on why we think the CEO compensation looks appropriate.

Check out our latest analysis for Intra-Cellular Therapies

Comparing Intra-Cellular Therapies, Inc.'s CEO Compensation With the industry

According to our data, Intra-Cellular Therapies, Inc. has a market capitalization of US$3.5b, and paid its CEO total annual compensation worth US$5.5m over the year to December 2020. Notably, that's an increase of 16% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$767k.

On comparing similar companies from the same industry with market caps ranging from US$2.0b to US$6.4b, we found that the median CEO total compensation was US$7.3m. So it looks like Intra-Cellular Therapies compensates Sharon Mates in line with the median for the industry. Moreover, Sharon Mates also holds US$48m worth of Intra-Cellular Therapies stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 28% of total compensation out of all the companies we analyzed, while other remuneration made up 72% of the pie. Intra-Cellular Therapies sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Intra-Cellular Therapies, Inc.'s Growth

Over the last three years, Intra-Cellular Therapies, Inc. has shrunk its earnings per share by 9.8% per year. In the last year, its revenue is up 3,187%.

The decrease in EPS could be a concern for some investors. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is 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 Intra-Cellular Therapies, Inc. Been A Good Investment?

Boasting a total shareholder return of 111% over three years, Intra-Cellular Therapies, Inc. 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.

To Conclude...

The overall company performance has been commendable, however there are still areas for improvement. Still, we think that until shareholders see an improvement in EPS growth, they may find it hard to justify a pay rise for the CEO.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 2 warning signs for Intra-Cellular Therapies that investors should be aware of in a dynamic business environment.

Switching gears from Intra-Cellular Therapies, 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.

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