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This article will reflect on the compensation paid to Josh Disbrow who has served as CEO of Aytu BioScience, Inc. (NASDAQ:AYTU) since 2015. This analysis will also assess whether Aytu BioScience pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing Aytu BioScience, Inc.'s CEO Compensation With the industry
Our data indicates that Aytu BioScience, Inc. has a market capitalization of US$153m, and total annual CEO compensation was reported as US$1.6m for the year to June 2020. Notably, that's an increase of 52% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$608k.
On examining similar-sized companies in the industry with market capitalizations between US$100m and US$400m, we discovered that the median CEO total compensation of that group was US$1.3m. From this we gather that Josh Disbrow is paid around the median for CEOs in the industry. Furthermore, Josh Disbrow directly owns US$836k worth of shares in the company.
On an industry level, roughly 29% of total compensation represents salary and 71% is other remuneration. Aytu BioScience pays out 38% of remuneration in the form of a salary, significantly higher than the industry average. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Aytu BioScience, Inc.'s Growth
Aytu BioScience, Inc. has seen its earnings per share (EPS) increase by 156% a year over the past three years. Its revenue is up 489% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. 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 BioScience, Inc. Been A Good Investment?
Since shareholders would have lost about 97% over three years, some Aytu BioScience, Inc. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
As we touched on above, Aytu BioScience, Inc. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. At the same time, the company has logged negative shareholder returns over the last three years. But EPS growth is moving in a favorable direction, certainly a positive sign. Overall, we wouldn't say Josh is paid an unjustified compensation, but shareholders might not favor a raise before shareholder returns show a positive trend.
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. That's why we did our research, and identified 3 warning signs for Aytu BioScience (of which 1 is a bit concerning!) that you should know about in order to have a holistic understanding of the stock.
Switching gears from Aytu BioScience, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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