Why We Think Xenetic Biosciences, Inc.'s (NASDAQ:XBIO) CEO Compensation Is Not Excessive At All
The performance at Xenetic Biosciences, Inc. (NASDAQ:XBIO) has been rather lacklustre of late and shareholders may be wondering what CEO Jeff Eisenberg is planning to do about this. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 21 December 2022. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. We have prepared some analysis below to show that CEO compensation looks to be reasonable.
Check out our latest analysis for Xenetic Biosciences
Comparing Xenetic Biosciences, Inc.'s CEO Compensation With The Industry
According to our data, Xenetic Biosciences, Inc. has a market capitalization of US$5.6m, and paid its CEO total annual compensation worth US$750k over the year to December 2021. We note that's an increase of 68% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$368k.
On comparing similar-sized companies in the American Biotechs industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$1.7m. In other words, Xenetic Biosciences pays its CEO lower than the industry median.
Speaking on an industry level, nearly 15% of total compensation represents salary, while the remainder of 85% is other remuneration. Xenetic Biosciences pays out 49% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Xenetic Biosciences, Inc.'s Growth Numbers
Over the past three years, Xenetic Biosciences, Inc. has seen its earnings per share (EPS) grow by 100% per year. In the last year, its revenue is up 59%.
Shareholders would be glad to know that the company has improved itself over the last few years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. 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 Xenetic Biosciences, Inc. Been A Good Investment?
The return of -74% over three years would not have pleased Xenetic Biosciences, Inc. shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
The fact that shareholders are sitting on a loss is certainly disheartening. This contrasts to the strong EPS growth recently however, and suggests that there may be other factors at play driving down the share price. A key question may be why the fundamentals have not yet been reflected into the share price. The upcoming AGM will provide shareholders the opportunity to raise their concerns and evaluate if the board’s judgement and decision-making is aligned with their expectations.
CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 5 warning signs for Xenetic Biosciences you should be aware of, and 2 of them make us uncomfortable.
Switching gears from Xenetic Biosciences, 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.
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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.
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