Stock Analysis

Here's Why Shareholders May Consider Paying Imugene Limited's (ASX:IMU) CEO A Little More

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ASX:IMU
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Shareholders will be pleased by the robust performance of Imugene Limited (ASX:IMU) recently and this will be kept in mind in the upcoming AGM on 16 November 2022. The focus will probably be on the future strategic initiatives that the board and management will put in place to improve the business rather than executive remuneration when they cast their votes on company resolutions. We have prepared some analysis below and we show why we think CEO compensation looks decent with even the possibility for a raise.

See our latest analysis for Imugene

Comparing Imugene Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Imugene Limited has a market capitalization of AU$1.2b, and reported total annual CEO compensation of AU$1.2m for the year to June 2022. That's a notable increase of 46% on last year. In particular, the salary of AU$600.0k, makes up a fairly large portion of the total compensation being paid to the CEO.

On comparing similar companies from the same industry with market caps ranging from AU$608m to AU$2.4b, we found that the median CEO total compensation was AU$7.3m. Accordingly, Imugene pays its CEO under the industry median. Furthermore, Leslie Chong directly owns AU$15m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20222021Proportion (2022)
Salary AU$600k AU$408k 52%
Other AU$554k AU$381k 48%
Total CompensationAU$1.2m AU$789k100%

Talking in terms of the industry, salary represented approximately 49% of total compensation out of all the companies we analyzed, while other remuneration made up 51% of the pie. There isn't a significant difference between Imugene and the broader market, in terms of salary allocation in the overall compensation package. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

ceo-compensation
ASX:IMU CEO Compensation November 11th 2022

A Look at Imugene Limited's Growth Numbers

Over the last three years, Imugene Limited has shrunk its earnings per share by 41% per year. In the last year, its revenue is up 79%.

The reduction in EPS, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Imugene Limited Been A Good Investment?

Most shareholders would probably be pleased with Imugene Limited for providing a total return of 333% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

The company's overall performance, while not bad, could be better. If it continues on the same road, shareholders might feel even more confident about their investment, and have little to no objections concerning CEO pay. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

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've identified 2 warning signs for Imugene that investors should be aware of in a dynamic business environment.

Important note: Imugene 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.

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Find out whether Imugene is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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