Yahoo Finance We Think Sangamo Therapeutics, Inc.'s (NASDAQ:SGMO) CEO Compensation Package Needs To Be Put Under A Microscope
Key Insights
Sangamo Therapeutics will host its Annual General Meeting on 4th of June
Salary of US$716.4k is part of CEO Sandy Macrae's total remuneration
The total compensation is 119% higher than the average for the industry
Sangamo Therapeutics' three-year loss to shareholders was 94% while its EPS was down 15% over the past three years
Sangamo Therapeutics, Inc. (NASDAQ:SGMO) has not performed well recently and CEO Sandy Macrae will probably need to up their game. At the upcoming AGM on 4th of June, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. We present the case why we think CEO compensation is out of sync with company performance.
Check out our latest analysis for Sangamo Therapeutics
How Does Total Compensation For Sandy Macrae Compare With Other Companies In The Industry?
At the time of writing, our data shows that Sangamo Therapeutics, Inc. has a market capitalization of US$124m, and reported total annual CEO compensation of US$2.4m for the year to December 2023. Notably, that's a decrease of 50% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$716k.
On comparing similar-sized companies in the American Biotechs industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$1.1m. This suggests that Sandy Macrae is paid more than the median for the industry. Furthermore, Sandy Macrae directly owns US$218k worth of shares in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$716k | US$709k | 30% |
Other | US$1.7m | US$4.1m | 70% |
Total Compensation | US$2.4m | US$4.8m | 100% |
On an industry level, around 23% of total compensation represents salary and 77% is other remuneration. Sangamo Therapeutics pays out 30% of remuneration in the form of a salary, significantly higher than the industry average. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Sangamo Therapeutics, Inc.'s Growth
Sangamo Therapeutics, Inc. has reduced its earnings per share by 15% a year over the last three years. Its revenue is down 92% over the previous year.
Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Sangamo Therapeutics, Inc. Been A Good Investment?
Few Sangamo Therapeutics, Inc. shareholders would feel satisfied with the return of -94% over three years. So shareholders would probably want the company to be less generous with CEO compensation.
In Summary...
Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.
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 4 warning signs for Sangamo Therapeutics (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.
Important note: Sangamo Therapeutics is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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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.
