Zelira Therapeutics Limited's (ASX:ZLD) CEO Will Probably Find It Hard To See A Huge Raise This Year

Key Insights

• Zelira Therapeutics to hold its Annual General Meeting on 15th of November
• Total pay for CEO Oludare Odumosu includes AU$445.4k salary
• Total compensation is similar to the industry average
• Zelira Therapeutics' three-year loss to shareholders was 92% while its EPS grew by 17% over the past three years

In the past three years, the share price of Zelira Therapeutics Limited (ASX:ZLD) has struggled to grow and now shareholders are sitting on a loss. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 15th of November. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

See our latest analysis for Zelira Therapeutics

How Does Total Compensation For Oludare Odumosu Compare With Other Companies In The Industry?

According to our data, Zelira Therapeutics Limited has a market capitalization of AU$11m, and paid its CEO total annual compensation worth AU$479k over the year to June 2023. That's a notable decrease of 25% on last year. Notably, the salary which is AU$445.4k, represents most of the total compensation being paid.

For comparison, other companies in the Australian Pharmaceuticals industry with market capitalizations below AU$311m, reported a median total CEO compensation of AU$673k. From this we gather that Oludare Odumosu is paid around the median for CEOs in the industry. What's more, Oludare Odumosu holds AU$128k worth of shares in the company in their own name.

Component	2023	2022	Proportion (2023)
Salary	AU$445k	AU$449k	93%
Other	AU$33k	AU$193k	7%
Total Compensation	AU$479k	AU$642k	100%

Speaking on an industry level, nearly 61% of total compensation represents salary, while the remainder of 39% is other remuneration. According to our research, Zelira Therapeutics has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Zelira Therapeutics Limited's Growth

Zelira Therapeutics Limited's earnings per share (EPS) grew 17% per year over the last three years. In the last year, its revenue is down 80%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Zelira Therapeutics Limited Been A Good Investment?

With a total shareholder return of -92% over three years, Zelira Therapeutics Limited shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

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 5 warning signs for Zelira Therapeutics (of which 4 are a bit concerning!) that you should know about in order to have a holistic understanding of the stock.

Important note: Zelira 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.

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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.