Yahoo Finance We Think Shareholders Are Less Likely To Approve A Pay Rise For Cynata Therapeutics Limited's (ASX:CYP) CEO For Now
The underwhelming share price performance of Cynata Therapeutics Limited (ASX:CYP) in the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 22 November 2022. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.
Check out our latest analysis for Cynata Therapeutics
Comparing Cynata Therapeutics Limited's CEO Compensation With The Industry
Our data indicates that Cynata Therapeutics Limited has a market capitalization of AU$50m, and total annual CEO compensation was reported as AU$716k for the year to June 2022. That's a notable decrease of 21% on last year. We note that the salary of AU$358.8k makes up a sizeable portion of the total compensation received by the CEO.
In comparison with other companies in the industry with market capitalizations under AU$295m, the reported median total CEO compensation was AU$638k. This suggests that Cynata Therapeutics remunerates its CEO largely in line with the industry average. Furthermore, Ross MacDonald directly owns AU$725k worth of shares in the company.
Component | 2022 | 2021 | Proportion (2022) |
Salary | AU$359k | AU$361k | 50% |
Other | AU$357k | AU$546k | 50% |
Total Compensation | AU$716k | AU$907k | 100% |
Speaking on an industry level, nearly 49% of total compensation represents salary, while the remainder of 51% is other remuneration. Although there is a difference in how total compensation is set, Cynata Therapeutics more or less reflects the market in terms of setting the salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at Cynata Therapeutics Limited's Growth Numbers
Over the past three years, Cynata Therapeutics Limited has seen its earnings per share (EPS) grow by 29% per year. In the last year, its revenue is up 403%.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Cynata Therapeutics Limited Been A Good Investment?
Few Cynata Therapeutics Limited shareholders would feel satisfied with the return of -71% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.
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 Cynata Therapeutics (of which 1 makes us a bit uncomfortable!) that you should know about in order to have a holistic understanding of the stock.
Switching gears from Cynata Therapeutics, 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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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