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How Should Investors Feel About AnaptysBio's (NASDAQ:ANAB) CEO Remuneration?

Simply Wall St
·3 min read

Hamza Suria has been the CEO of AnaptysBio, Inc. (NASDAQ:ANAB) since 2011, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for AnaptysBio

How Does Total Compensation For Hamza Suria Compare With Other Companies In The Industry?

Our data indicates that AnaptysBio, Inc. has a market capitalization of US$485m, and total annual CEO compensation was reported as US$7.9m for the year to December 2019. We note that's an increase of 54% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$567k.

On comparing similar companies from the same industry with market caps ranging from US$200m to US$800m, we found that the median CEO total compensation was US$2.4m. Accordingly, our analysis reveals that AnaptysBio, Inc. pays Hamza Suria north of the industry median. Furthermore, Hamza Suria directly owns US$846k worth of shares in the company.

Component

2019

2018

Proportion (2019)

Salary

US$567k

US$547k

7%

Other

US$7.3m

US$4.6m

93%

Total Compensation

US$7.9m

US$5.1m

100%

On an industry level, roughly 23% of total compensation represents salary and 77% is other remuneration. In AnaptysBio's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
ceo-compensation

AnaptysBio, Inc.'s Growth

AnaptysBio, Inc. has reduced its earnings per share by 26% a year over the last three years. It achieved revenue growth of 81% over the last year.

Investors would be a bit wary of companies that have lower EPS But in contrast the revenue growth is strong, suggesting future potential for EPS growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 AnaptysBio, Inc. Been A Good Investment?

With a three year total loss of 25% for the shareholders, AnaptysBio, Inc. would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As we noted earlier, AnaptysBio pays its CEO higher than the norm for similar-sized companies belonging to the same industry. At the same time, looking at EPS and total shareholder returns, it's tough to say AnaptysBio is in a sound position, considering both metrics are down. On a more positive note, the company has produced a more positive revenue growth more recently. Few would argue that it's wise for the company to pay any more, before returns improve.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 3 warning signs for AnaptysBio (1 makes us a bit uncomfortable!) that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.