Here's Why Benitec Biopharma Inc.'s (NASDAQ:BNTC) CEO Compensation Is The Least Of Shareholders Concerns
Key Insights
Benitec Biopharma will host its Annual General Meeting on 6th of December
Total pay for CEO Jerel Banks includes US$539.5k salary
The total compensation is 33% less than the average for the industry
Benitec Biopharma's three-year loss to shareholders was 94% while its EPS grew by 72% over the past three years
Shareholders may be wondering what CEO Jerel Banks plans to do to improve the less than great performance at Benitec Biopharma Inc. (NASDAQ:BNTC) recently. At the next AGM coming up on 6th of December, they can influence managerial decision making through voting on resolutions, including executive remuneration. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. In our opinion, CEO compensation does not look excessive and we discuss why.
See our latest analysis for Benitec Biopharma
How Does Total Compensation For Jerel Banks Compare With Other Companies In The Industry?
At the time of writing, our data shows that Benitec Biopharma Inc. has a market capitalization of US$7.8m, and reported total annual CEO compensation of US$919k for the year to June 2023. We note that's an increase of 15% above last year. We note that the salary of US$539.5k makes up a sizeable portion of the total compensation received by the CEO.
In comparison with other companies in the American Biotechs industry with market capitalizations under US$200m, the reported median total CEO compensation was US$1.4m. Accordingly, Benitec Biopharma pays its CEO under the industry median.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$540k | US$506k | 59% |
Other | US$379k | US$294k | 41% |
Total Compensation | US$919k | US$800k | 100% |
Speaking on an industry level, nearly 23% of total compensation represents salary, while the remainder of 77% is other remuneration. Benitec Biopharma pays out 59% of remuneration in the form of a salary, significantly higher than the industry average. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
A Look at Benitec Biopharma Inc.'s Growth Numbers
Benitec Biopharma Inc. has seen its earnings per share (EPS) increase by 72% a year over the past three years. In the last year, its revenue is up 2.7%.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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 Benitec Biopharma Inc. Been A Good Investment?
With a total shareholder return of -94% over three years, Benitec Biopharma Inc. shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
The fact that shareholders have earned a negative share price return is certainly disconcerting. This diverges with the robust growth in EPS, suggesting that there is a large discrepancy between share price and fundamentals. A key focus for the board and management will be how to align the share price with fundamentals. In the upcoming AGM, shareholders should take this opportunity to raise these concerns with the board and revisit their investment thesis with regards to the company.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 5 warning signs for Benitec Biopharma 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.
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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.
