The underwhelming share price performance of Clinuvel Pharmaceuticals Limited (ASX:CUV) in the past three years would have disappointed many shareholders. 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 25 October 2022 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 Clinuvel Pharmaceuticals Limited's CEO Compensation With The Industry
According to our data, Clinuvel Pharmaceuticals Limited has a market capitalization of AU$892m, and paid its CEO total annual compensation worth AU$7.1m over the year to June 2022. That's a notable increase of 43% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at AU$1.5m.
On comparing similar companies from the same industry with market caps ranging from AU$319m to AU$1.3b, we found that the median CEO total compensation was AU$1.9m. Accordingly, our analysis reveals that Clinuvel Pharmaceuticals Limited pays Philippe Wolgen north of the industry median. Furthermore, Philippe Wolgen directly owns AU$56m worth of shares in the company, implying that they are deeply invested in the company's success.
On an industry level, around 49% of total compensation represents salary and 51% is other remuneration. It's interesting to note that Clinuvel Pharmaceuticals allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Clinuvel Pharmaceuticals Limited's Growth
Clinuvel Pharmaceuticals Limited's earnings per share (EPS) grew 3.9% per year over the last three years. It achieved revenue growth of 37% over the last year.
It's great to see that revenue growth is strong. With that in mind, the modestly improving EPS seems positive. So while we'd stop short of saying growth is absolutely outstanding, there are definitely some clear positives! 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 Clinuvel Pharmaceuticals Limited Been A Good Investment?
The return of -44% over three years would not have pleased Clinuvel Pharmaceuticals Limited shareholders. So shareholders would probably want the company to be less generous with CEO compensation.
The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. 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. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. 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.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for Clinuvel Pharmaceuticals that investors should think about before committing capital to this stock.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
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.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here