Yahoo Finance Increases to CEO Compensation Might Be Put On Hold For Now at Botanix Pharmaceuticals Limited (ASX:BOT)
The underwhelming share price performance of Botanix Pharmaceuticals Limited (ASX:BOT) in the past three years would have disappointed many shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 26 October 2021. They could also influence management through voting on resolutions such as executive remuneration. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.
Check out our latest analysis for Botanix Pharmaceuticals
How Does Total Compensation For Vince Ippolito Compare With Other Companies In The Industry?
According to our data, Botanix Pharmaceuticals Limited has a market capitalization of AU$63m, and paid its CEO total annual compensation worth AU$1.0m over the year to June 2021. We note that's a decrease of 52% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at AU$396k.
On comparing similar-sized companies in the industry with market capitalizations below AU$270m, we found that the median total CEO compensation was AU$466k. Accordingly, our analysis reveals that Botanix Pharmaceuticals Limited pays Vince Ippolito north of the industry median.
Component | 2021 | 2020 | Proportion (2021) |
Salary | AU$396k | AU$574k | 39% |
Other | AU$609k | AU$1.5m | 61% |
Total Compensation | AU$1.0m | AU$2.1m | 100% |
Speaking on an industry level, nearly 59% of total compensation represents salary, while the remainder of 41% is other remuneration. Botanix Pharmaceuticals pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Botanix Pharmaceuticals Limited's Growth Numbers
Over the past three years, Botanix Pharmaceuticals Limited has seen its earnings per share (EPS) grow by 35% per year. It saw its revenue drop 9.1% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Botanix Pharmaceuticals Limited Been A Good Investment?
Since shareholders would have lost about 24% over three years, some Botanix Pharmaceuticals Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 3 warning signs for Botanix Pharmaceuticals (1 doesn't sit too well with us!) that you should be aware of before investing here.
Switching gears from Botanix Pharmaceuticals, 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. 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.
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