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Shareholders of Aytu Biopharma, Inc. (NASDAQ:AYTU) will have been dismayed by the negative share price return over the last three years. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. The AGM coming up on the 21 May 2021 could be an opportunity for shareholders to bring these concerns to the board's attention. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.
Comparing Aytu Biopharma, Inc.'s CEO Compensation With the industry
According to our data, Aytu Biopharma, Inc. has a market capitalization of US$126m, and paid its CEO total annual compensation worth US$1.6m over the year to June 2020. That's a notable increase of 52% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$608k.
In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$732k. This suggests that Josh Disbrow is paid more than the median for the industry. Furthermore, Josh Disbrow directly owns US$4.8m worth of shares in the company, implying that they are deeply invested in the company's success.
On an industry level, roughly 28% of total compensation represents salary and 72% is other remuneration. According to our research, Aytu Biopharma has allocated a higher percentage of pay to salary in comparison to the wider industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Aytu Biopharma, Inc.'s Growth Numbers
Aytu Biopharma, Inc.'s earnings per share (EPS) grew 156% per year over the last three years. In the last year, its revenue is up 489%.
This demonstrates that the company has been improving recently and is good news for the shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. 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 Aytu Biopharma, Inc. Been A Good Investment?
With a total shareholder return of -93% over three years, Aytu Biopharma, Inc. shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.
Shareholders have not seen their shares grow in value, rather they have seen their shares decline. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. 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.
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. We identified 3 warning signs for Aytu Biopharma (1 doesn't sit too well with us!) that you should be aware of before investing here.
Important note: Aytu Biopharma 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.
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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