Yahoo Finance Most Shareholders Will Probably Agree With Windtree Therapeutics, Inc.'s (NASDAQ:WINT) CEO Compensation
The performance at Windtree Therapeutics, Inc. (NASDAQ:WINT) has been rather lacklustre of late and shareholders may be wondering what CEO Craig Fraser is planning to do about this. At the next AGM coming up on 16 June 2021, they can influence managerial decision making through voting on resolutions, including executive remuneration. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. We have prepared some analysis below to show that CEO compensation looks to be reasonable.
See our latest analysis for Windtree Therapeutics
Comparing Windtree Therapeutics, Inc.'s CEO Compensation With the industry
Our data indicates that Windtree Therapeutics, Inc. has a market capitalization of US$67m, and total annual CEO compensation was reported as US$770k for the year to December 2020. That's a notable decrease of 28% on last year. We note that the salary of US$460.3k makes up a sizeable portion of the total compensation received by the CEO.
For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$1.1m. In other words, Windtree Therapeutics pays its CEO lower than the industry median. Furthermore, Craig Fraser directly owns US$75k worth of shares in the company.
Component | 2020 | 2019 | Proportion (2020) |
Salary | US$460k | US$452k | 60% |
Other | US$310k | US$611k | 40% |
Total Compensation | US$770k | US$1.1m | 100% |
Speaking on an industry level, nearly 20% of total compensation represents salary, while the remainder of 80% is other remuneration. Windtree Therapeutics pays out 60% of remuneration in the form of a salary, significantly higher than the industry average. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Windtree Therapeutics, Inc.'s Growth
Windtree Therapeutics, Inc.'s earnings per share (EPS) grew 86% per year over the last three years. It has seen most of its revenue evaporate over the past year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in 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 Windtree Therapeutics, Inc. Been A Good Investment?
With a total shareholder return of -79% over three years, Windtree Therapeutics, Inc. shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
The fact that shareholders have earned a negative share price return is certainly disconcerting. The share price trend has diverged with the robust growth in EPS however, suggesting there may be other factors that could be driving the price performance. 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.
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 5 warning signs for Windtree Therapeutics (2 can't be ignored!) that you should be aware of before investing here.
Important note: Windtree Therapeutics 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.
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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