This Is Why Xenetic Biosciences, Inc.'s (NASDAQ:XBIO) CEO Compensation Looks Appropriate
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. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 07 December 2022. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. In our opinion, CEO compensation does not look excessive and we discuss why.
View our latest analysis for Xenetic Biosciences
Comparing Xenetic Biosciences, Inc.'s CEO Compensation With The Industry
Our data indicates that Xenetic Biosciences, Inc. has a market capitalization of US$6.7m, and total annual CEO compensation was reported as US$750k for the year to December 2021. That's a notable increase of 68% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$368k.
For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$1.8m. That is to say, Jeff Eisenberg is paid under the industry median.
Component | 2021 | 2020 | Proportion (2021) |
Salary | US$368k | US$350k | 49% |
Other | US$383k | US$96k | 51% |
Total Compensation | US$750k | US$446k | 100% |
Speaking on an industry level, nearly 15% of total compensation represents salary, while the remainder of 85% is other remuneration. It's interesting to note that Xenetic Biosciences pays out a greater portion of remuneration through salary, compared to the industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Xenetic Biosciences, Inc.'s Growth
Xenetic Biosciences, Inc.'s earnings per share (EPS) grew 100% per year over the last three years. Its revenue is up 59% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Xenetic Biosciences, Inc. Been A Good Investment?
With a total shareholder return of -66% over three years, Xenetic Biosciences, Inc. shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.
In Summary...
The loss to shareholders over the past three years is certainly concerning. 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 focus for the board and management will be how to align the share price with fundamentals. In the upcoming AGM, shareholders will get the opportunity to discuss these concerns with the board and assess if the board's plan is likely to improve company performance.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 5 warning signs for Xenetic Biosciences you should be aware of, and 2 of them shouldn't be ignored.
Important note: Xenetic Biosciences is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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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