We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Khiron Life Sciences Corp.'s (CVE:KHRN) CEO For Now

The underwhelming share price performance of Khiron Life Sciences Corp. (CVE:KHRN) in the past three years would have disappointed many shareholders. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 30 June 2021. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Khiron Life Sciences

How Does Total Compensation For Alvaro Torres Compare With Other Companies In The Industry?

According to our data, Khiron Life Sciences Corp. has a market capitalization of CA$64m, and paid its CEO total annual compensation worth CA$346k over the year to December 2020. We note that's a decrease of 31% compared to last year. Notably, the salary which is CA$241.8k, represents most of the total compensation being paid.

On comparing similar-sized companies in the industry with market capitalizations below CA$246m, we found that the median total CEO compensation was CA$241k. Accordingly, our analysis reveals that Khiron Life Sciences Corp. pays Alvaro Torres north of the industry median. What's more, Alvaro Torres holds CA$270k worth of shares in the company in their own name.

Component	2020	2019	Proportion (2020)
Salary	CA$242k	CA$255k	70%
Other	CA$104k	CA$245k	30%
Total Compensation	CA$346k	CA$500k	100%

Speaking on an industry level, nearly 70% of total compensation represents salary, while the remainder of 30% is other remuneration. Although there is a difference in how total compensation is set, Khiron Life Sciences more or less reflects the market in terms of setting the salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Khiron Life Sciences Corp.'s Growth

Over the past three years, Khiron Life Sciences Corp. has seen its earnings per share (EPS) grow by 15% per year. In the last year, its revenue is down 4.7%.

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. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Khiron Life Sciences Corp. Been A Good Investment?

The return of -65% over three years would not have pleased Khiron Life Sciences Corp. shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. 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. 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. In our study, we found 6 warning signs for Khiron Life Sciences you should be aware of, and 2 of them are concerning.

Switching gears from Khiron Life Sciences, 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. 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.
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