Yahoo Finance Shareholders May Not Be So Generous With Khiron Life Sciences Corp.'s (CVE:KHRN) CEO Compensation And Here's Why
In the past three years, the share price of Khiron Life Sciences Corp. (CVE:KHRN) has struggled to grow and now shareholders are sitting on a loss. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. The AGM coming up on the 30 June 2021 could be an opportunity for shareholders to bring these concerns to the board's attention. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.
Check out our latest analysis for Khiron Life Sciences
Comparing Khiron Life Sciences Corp.'s CEO Compensation With the industry
At the time of writing, our data shows that Khiron Life Sciences Corp. has a market capitalization of CA$64m, and reported total annual CEO compensation of CA$346k for the year to December 2020. We note that's a decrease of 31% compared to last year. In particular, the salary of CA$241.8k, makes up a huge portion of the total compensation being paid to the CEO.
In comparison with other companies in the industry with market capitalizations under CA$246m, the reported median total CEO compensation was CA$241k. Hence, we can conclude that Alvaro Torres is remunerated higher than the industry median. Moreover, Alvaro Torres also holds CA$270k worth of Khiron Life Sciences stock directly under their own name.
Component | 2020 | 2019 | Proportion (2020) |
Salary | CA$242k | CA$255k | 70% |
Other | CA$104k | CA$245k | 30% |
Total Compensation | CA$346k | CA$500k | 100% |
Talking in terms of the industry, salary represented approximately 70% of total compensation out of all the companies we analyzed, while other remuneration made up 30% of the pie. Our data reveals that Khiron Life Sciences allocates salary more or less in line with the wider market. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Khiron Life Sciences Corp.'s Growth
Khiron Life Sciences Corp. has seen its earnings per share (EPS) increase by 15% a year over the past three years. In the last year, its revenue is down 4.7%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Khiron Life Sciences Corp. Been A Good Investment?
The return of -65% over three years would not have pleased Khiron Life Sciences Corp. shareholders. So shareholders would probably want the company to be less generous with CEO compensation.
In Summary...
Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 6 warning signs for Khiron Life Sciences (of which 2 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.
Switching gears from Khiron Life Sciences, 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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