Yahoo Finance Shareholders Will Likely Find Sutro Biopharma, Inc.'s (NASDAQ:STRO) CEO Compensation Acceptable
Key Insights
Sutro Biopharma to hold its Annual General Meeting on 6th of June
Total pay for CEO Bill Newell includes US$686.7k salary
Total compensation is 33% below industry average
Sutro Biopharma's three-year loss to shareholders was 77% while its EPS was down 4.2% over the past three years
The performance at Sutro Biopharma, Inc. (NASDAQ:STRO) has been rather lacklustre of late and shareholders may be wondering what CEO Bill Newell is planning to do about this. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 6th of June. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. In our opinion, CEO compensation does not look excessive and we discuss why.
View our latest analysis for Sutro Biopharma
How Does Total Compensation For Bill Newell Compare With Other Companies In The Industry?
At the time of writing, our data shows that Sutro Biopharma, Inc. has a market capitalization of US$354m, and reported total annual CEO compensation of US$2.1m for the year to December 2023. Notably, that's a decrease of 30% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$687k.
On comparing similar companies from the American Biotechs industry with market caps ranging from US$200m to US$800m, we found that the median CEO total compensation was US$3.2m. That is to say, Bill Newell is paid under the industry median. Moreover, Bill Newell also holds US$1.5m worth of Sutro Biopharma stock directly under their own name.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$687k | US$663k | 32% |
Other | US$1.4m | US$2.4m | 68% |
Total Compensation | US$2.1m | US$3.0m | 100% |
Speaking on an industry level, nearly 23% of total compensation represents salary, while the remainder of 77% is other remuneration. Sutro Biopharma is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Sutro Biopharma, Inc.'s Growth Numbers
Sutro Biopharma, Inc. has reduced its earnings per share by 4.2% a year over the last three years. In the last year, its revenue is up 107%.
Investors would be a bit wary of companies that have lower EPS But in contrast the revenue growth is strong, suggesting future potential for EPS growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Sutro Biopharma, Inc. Been A Good Investment?
The return of -77% over three years would not have pleased Sutro Biopharma, Inc. shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
The fact that shareholders are sitting on a loss is certainly disheartening. The fact that earnings growth has gone backwards could be a factor for the downward trend in the share price. In the upcoming AGM, shareholders should take this opportunity to raise these concerns with the board and revisit their investment thesis with regards to the company.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 3 warning signs for Sutro Biopharma that investors should look into moving forward.
Switching gears from Sutro Biopharma, 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.
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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.
