Increases to CEO Compensation Might Be Put On Hold For Now at Theratechnologies Inc. (TSE:TH)

Key Insights

• Theratechnologies will host its Annual General Meeting on 9th of May
• Salary of US$658.5k is part of CEO Paul Lévesque's total remuneration
• The total compensation is 446% higher than the average for the industry
• Theratechnologies' EPS grew by 6.3% over the past three years while total shareholder loss over the past three years was 90%

The underwhelming share price performance of Theratechnologies Inc. (TSE:TH) in the past three years would have disappointed many shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 9th of May. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Theratechnologies

Comparing Theratechnologies Inc.'s CEO Compensation With The Industry

At the time of writing, our data shows that Theratechnologies Inc. has a market capitalization of CA$82m, and reported total annual CEO compensation of US$1.9m for the year to November 2023. Notably, that's a decrease of 16% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$659k.

In comparison with other companies in the Canadian Biotechs industry with market capitalizations under CA$274m, the reported median total CEO compensation was US$348k. Hence, we can conclude that Paul Lévesque is remunerated higher than the industry median. What's more, Paul Lévesque holds CA$129k worth of shares in the company in their own name.

Component	2023	2022	Proportion (2023)
Salary	US$659k	US$657k	35%
Other	US$1.2m	US$1.6m	65%
Total Compensation	US$1.9m	US$2.2m	100%

Speaking on an industry level, nearly 67% of total compensation represents salary, while the remainder of 33% is other remuneration. In Theratechnologies' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Theratechnologies Inc.'s Growth

Over the past three years, Theratechnologies Inc. has seen its earnings per share (EPS) grow by 6.3% per year. In the last year, its revenue is down 4.1%.

We generally like to see a little revenue growth, but it is good to see a modest EPS growth at least. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Theratechnologies Inc. Been A Good Investment?

With a total shareholder return of -90% over three years, Theratechnologies Inc. shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would be keen to know what's holding the stock back when earnings have grown. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 4 warning signs for Theratechnologies you should be aware of, and 2 of them can't be ignored.

Switching gears from Theratechnologies, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.