Nuvo Pharmaceuticals Inc.'s (TSE:MRV) CEO Might Not Expect Shareholders To Be So Generous This Year

Nuvo Pharmaceuticals Inc. (TSE:MRV) has not performed well recently and CEO Jesse Ledger will probably need to up their game. At the upcoming AGM on 17 May 2021, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Check out our latest analysis for Nuvo Pharmaceuticals

Comparing Nuvo Pharmaceuticals Inc.'s CEO Compensation With the industry

According to our data, Nuvo Pharmaceuticals Inc. has a market capitalization of CA$19m, and paid its CEO total annual compensation worth CA$577k over the year to December 2020. We note that's a decrease of 19% compared to last year. We note that the salary portion, which stands at CA$368.7k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under CA$242m, the reported median total CEO compensation was CA$218k. Hence, we can conclude that Jesse Ledger is remunerated higher than the industry median. What's more, Jesse Ledger holds CA$182k worth of shares in the company in their own name.

Component	2020	2019	Proportion (2020)
Salary	CA$369k	CA$350k	64%
Other	CA$208k	CA$365k	36%
Total Compensation	CA$577k	CA$715k	100%

On an industry level, around 67% of total compensation represents salary and 33% is other remuneration. Although there is a difference in how total compensation is set, Nuvo Pharmaceuticals more or less reflects the market in terms of setting the salary. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Nuvo Pharmaceuticals Inc.'s Growth Numbers

Nuvo Pharmaceuticals Inc. has reduced its earnings per share by 1.0% a year over the last three years. It achieved revenue growth of 5.9% over the last year.

The lack of EPS growth is certainly uninspiring. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Nuvo Pharmaceuticals Inc. Been A Good Investment?

The return of -43% over three years would not have pleased Nuvo Pharmaceuticals Inc. shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 4 warning signs (and 2 which make us uncomfortable) in Nuvo Pharmaceuticals we think you should know about.

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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