Under the guidance of CEO Ankit Mahadevia, Spero Therapeutics, Inc. (NASDAQ:SPRO) has performed reasonably well recently. As shareholders go into the upcoming AGM on 17 August 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. We present our case of why we think CEO compensation looks fair.
How Does Total Compensation For Ankit Mahadevia Compare With Other Companies In The Industry?
At the time of writing, our data shows that Spero Therapeutics, Inc. has a market capitalization of US$447m, and reported total annual CEO compensation of US$2.1m for the year to December 2020. That's a notable increase of 19% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$537k.
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$2.5m. This suggests that Spero Therapeutics remunerates its CEO largely in line with the industry average. Moreover, Ankit Mahadevia also holds US$916k worth of Spero Therapeutics stock directly under their own name.
Speaking on an industry level, nearly 20% of total compensation represents salary, while the remainder of 80% is other remuneration. Spero Therapeutics is paying a higher share of its remuneration through a salary in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at Spero Therapeutics, Inc.'s Growth Numbers
Over the last three years, Spero Therapeutics, Inc. has not seen its earnings per share change much, though they have deteriorated slightly. In the last year, its revenue is up 57%.
The reduction in EPS, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. 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 Spero Therapeutics, Inc. Been A Good Investment?
Spero Therapeutics, Inc. has generated a total shareholder return of 27% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. Despite the pleasing results, we still think that any proposed increases to CEO compensation will be examined based on a case by case basis and linked to performance outcomes.
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 2 warning signs for Spero Therapeutics that investors should think about before committing capital to this stock.
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. 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.
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