Yahoo Finance We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Aurinia Pharmaceuticals Inc.'s (NASDAQ:AUPH) CEO For Now
Key Insights
Aurinia Pharmaceuticals will host its Annual General Meeting on 14th of June
CEO Peter Greenleaf's total compensation includes salary of US$822.9k
The total compensation is 157% higher than the average for the industry
Aurinia Pharmaceuticals' EPS grew by 34% over the past three years while total shareholder loss over the past three years was 59%
In the past three years, the share price of Aurinia Pharmaceuticals Inc. (NASDAQ:AUPH) has struggled to grow and now shareholders are sitting on a loss. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 14th of June. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.
View our latest analysis for Aurinia Pharmaceuticals
Comparing Aurinia Pharmaceuticals Inc.'s CEO Compensation With The Industry
At the time of writing, our data shows that Aurinia Pharmaceuticals Inc. has a market capitalization of US$769m, and reported total annual CEO compensation of US$11m for the year to December 2023. We note that's an increase of 20% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$823k.
For comparison, other companies in the American Biotechs industry with market capitalizations ranging between US$400m and US$1.6b had a median total CEO compensation of US$4.1m. Hence, we can conclude that Peter Greenleaf is remunerated higher than the industry median. Moreover, Peter Greenleaf also holds US$1.7m worth of Aurinia Pharmaceuticals stock directly under their own name.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$823k | US$791k | 8% |
Other | US$9.8m | US$8.0m | 92% |
Total Compensation | US$11m | US$8.8m | 100% |
Speaking on an industry level, nearly 23% of total compensation represents salary, while the remainder of 77% is other remuneration. Aurinia Pharmaceuticals sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Aurinia Pharmaceuticals Inc.'s Growth
Aurinia Pharmaceuticals Inc.'s earnings per share (EPS) grew 34% per year over the last three years. In the last year, its revenue is up 30%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Aurinia Pharmaceuticals Inc. Been A Good Investment?
The return of -59% over three years would not have pleased Aurinia Pharmaceuticals Inc. shareholders. So shareholders would probably want the company to be less generous with CEO compensation.
In Summary...
Shareholders have not seen their shares grow in value, rather they have seen their shares decline. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would be keen to know what's holding the stock back when earnings have grown. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 1 warning sign for Aurinia Pharmaceuticals that investors should look into moving forward.
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.
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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.
