Here's Why Biome Technologies plc's (LON:BIOM) CEO Is Unlikely to Expect A Pay Rise This Year

The anaemic share price growth at Biome Technologies plc (LON:BIOM) over the past few years has probably not impressed shareholders and may be due to earnings not growing over that period. Some of these issues will occupy shareholders' minds as the AGM rolls around on 21 April 2021. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

Check out our latest analysis for Biome Technologies

How Does Total Compensation For Paul Mines Compare With Other Companies In The Industry?

According to our data, Biome Technologies plc has a market capitalization of UK£11m, and paid its CEO total annual compensation worth UK£217k over the year to December 2020. Notably, that's a decrease of 8.3% over the year before. In particular, the salary of UK£187.2k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations under UK£145m, the reported median total CEO compensation was UK£216k. So it looks like Biome Technologies compensates Paul Mines in line with the median for the industry. Moreover, Paul Mines also holds UK£163k worth of Biome Technologies stock directly under their own name.

Component	2020	2019	Proportion (2020)
Salary	UK£187k	UK£205k	86%
Other	UK£30k	UK£31k	14%
Total Compensation	UK£217k	UK£237k	100%

Speaking on an industry level, nearly 65% of total compensation represents salary, while the remainder of 35% is other remuneration. It's interesting to note that Biome Technologies pays out a greater portion of remuneration through salary, compared to the industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Biome Technologies plc's Growth Numbers

Over the last three years, Biome Technologies plc has shrunk its earnings per share by 86% per year. In the last year, its revenue is down 18%.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Biome Technologies plc Been A Good Investment?

Biome Technologies plc has generated a total shareholder return of 2.8% over three years, so most shareholders wouldn't be too disappointed. Although, there's always room to improve. In light of that, investors might probably want to see an improvement on their returns before they feel generous about increasing the CEO remuneration.

To Conclude...

The lacklustre share price returns along with the lack of earnings growth makes us think that a strong rebound in the share price may be difficult. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 5 warning signs for Biome Technologies (of which 1 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.

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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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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