Why We Think BioNxt Solutions Inc.'s (CSE:BNXT) CEO Compensation Is Not Excessive At All

Key Insights

• BioNxt Solutions to hold its Annual General Meeting on 2nd of November
• Salary of CA$231.0k is part of CEO Hugh A. Rogers's total remuneration
• The total compensation is 51% less than the average for the industry
• BioNxt Solutions' EPS grew by 26% over the past three years while total shareholder loss over the past three years was 86%

The performance at BioNxt Solutions Inc. (CSE:BNXT) has been rather lacklustre of late and shareholders may be wondering what CEO Hugh A. Rogers is planning to do about this. At the next AGM coming up on 2nd of November, they can influence managerial decision making through voting on resolutions, including executive remuneration. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

Check out our latest analysis for BioNxt Solutions

How Does Total Compensation For Hugh A. Rogers Compare With Other Companies In The Industry?

According to our data, BioNxt Solutions Inc. has a market capitalization of CA$26m, and paid its CEO total annual compensation worth CA$240k over the year to December 2022. That's a fairly small increase of 7.0% over the previous year. We note that the salary portion, which stands at CA$231.0k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Canadian Pharmaceuticals industry with market capitalizations below CA$277m, reported a median total CEO compensation of CA$494k. That is to say, Hugh A. Rogers is paid under the industry median. Furthermore, Hugh A. Rogers directly owns CA$181k worth of shares in the company.

Component	2022	2021	Proportion (2022)
Salary	CA$231k	CA$216k	96%
Other	CA$9.5k	CA$8.7k	4%
Total Compensation	CA$240k	CA$225k	100%

Talking in terms of the industry, salary represented approximately 61% of total compensation out of all the companies we analyzed, while other remuneration made up 39% of the pie. BioNxt Solutions is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

BioNxt Solutions Inc.'s Growth

BioNxt Solutions Inc. has seen its earnings per share (EPS) increase by 26% a year over the past three years. It saw its revenue drop 14% over the last 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. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has BioNxt Solutions Inc. Been A Good Investment?

With a total shareholder return of -86% over three years, BioNxt Solutions Inc. shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Hugh A. receives almost all of their compensation through a salary. 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 focus for the board and management will be how to align the share price with fundamentals. 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.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 6 warning signs for BioNxt Solutions (4 are a bit concerning!) that you should be aware of before investing here.

Important note: BioNxt Solutions 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.