Steve Lisi became the CEO of Beyond Air, Inc. (NASDAQ:XAIR) in 2017, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Comparing Beyond Air, Inc.'s CEO Compensation With the industry
Our data indicates that Beyond Air, Inc. has a market capitalization of US$132m, and total annual CEO compensation was reported as US$1.3m for the year to March 2020. That's a notable decrease of 55% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$450k.
For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$568k. This suggests that Steve Lisi is paid more than the median for the industry. What's more, Steve Lisi holds US$6.0m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
On an industry level, roughly 23% of total compensation represents salary and 77% is other remuneration. Beyond Air 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 Beyond Air, Inc.'s Growth Numbers
Beyond Air, Inc.'s earnings per share (EPS) grew 6.4% per year over the last three years. Its revenue is down 94% over the previous year.
We generally like to see a little revenue growth, but the modest improvement in EPS is good. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 Beyond Air, Inc. Been A Good Investment?
Beyond Air, Inc. has served shareholders reasonably well, with a total return of 30% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
As we touched on above, Beyond Air, Inc. is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, EPS growth is not moving in the right direction, and the returns to shareholders could have been better, over the last three years. So while shareholders might not be overly concerned about CEO compensation, we suspect most would prefer to see improved performance, before thinking a bump in pay is in order.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 2 warning signs (and 1 which can't be ignored) in Beyond Air we think you should know about.
Important note: Beyond Air 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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