Shareholders May Be A Bit More Conservative With ImmuPharma plc's (LON:IMM) CEO Compensation For Now

The underwhelming share price performance of ImmuPharma plc (LON:IMM) 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. The AGM coming up on the 28 June 2021 could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

See our latest analysis for ImmuPharma

How Does Total Compensation For Dimitri Dimitriou Compare With Other Companies In The Industry?

According to our data, ImmuPharma plc has a market capitalization of UK£21m, and paid its CEO total annual compensation worth UK£320k over the year to December 2020. That's a fairly small increase of 3.4% over the previous year. We note that the salary portion, which stands at UK£292.3k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under UK£144m, the reported median total CEO compensation was UK£274k. From this we gather that Dimitri Dimitriou is paid around the median for CEOs in the industry. Moreover, Dimitri Dimitriou also holds UK£296k worth of ImmuPharma stock directly under their own name.

Component	2020	2019	Proportion (2020)
Salary	UK£292k	UK£248k	91%
Other	UK£28k	UK£62k	9%
Total Compensation	UK£320k	UK£310k	100%

Speaking on an industry level, nearly 69% of total compensation represents salary, while the remainder of 31% is other remuneration. ImmuPharma pays out 91% of remuneration in the form of a salary, significantly higher than the industry average. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

ImmuPharma plc's Growth

ImmuPharma plc has seen its earnings per share (EPS) increase by 17% a year over the past three years. Its revenue is up 62% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing 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 ImmuPharma plc Been A Good Investment?

Few ImmuPharma plc shareholders would feel satisfied with the return of -65% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

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 probably be keen to find out what are the other factors could be weighing down the stock. 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.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 5 warning signs (and 2 which make us uncomfortable) in ImmuPharma we think you should know about.

Important note: ImmuPharma 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. 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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