Here's Why Shareholders Should Examine Proteome Sciences plc's (LON:PRM) CEO Compensation Package More Closely

Key Insights

• Proteome Sciences to hold its Annual General Meeting on 16th of May
• CEO Mariola Sohngen's total compensation includes salary of UK£249.0k
• The total compensation is similar to the average for the industry
• Proteome Sciences' EPS declined by 48% over the past three years while total shareholder loss over the past three years was 59%

Shareholders will probably not be too impressed with the underwhelming results at Proteome Sciences plc (LON:PRM) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 16th of May. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

See our latest analysis for Proteome Sciences

How Does Total Compensation For Mariola Sohngen Compare With Other Companies In The Industry?

According to our data, Proteome Sciences plc has a market capitalization of UK£9.9m, and paid its CEO total annual compensation worth UK£261k over the year to December 2023. We note that's a decrease of 16% compared to last year. We note that the salary portion, which stands at UK£249.0k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the the United Kingdom Life Sciences industry with market capitalizations under UK£160m, the reported median total CEO compensation was UK£310k. So it looks like Proteome Sciences compensates Mariola Sohngen in line with the median for the industry.

Component	2023	2022	Proportion (2023)
Salary	UK£249k	UK£247k	95%
Other	UK£12k	UK£63k	5%
Total Compensation	UK£261k	UK£310k	100%

On an industry level, around 55% of total compensation represents salary and 45% is other remuneration. Investors will find it interesting that Proteome Sciences pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Proteome Sciences plc's Growth

Over the last three years, Proteome Sciences plc has shrunk its earnings per share by 48% per year. Its revenue is down 35% over the previous year.

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. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Proteome Sciences plc Been A Good Investment?

The return of -59% over three years would not have pleased Proteome Sciences plc shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Proteome Sciences pays its CEO a majority of compensation through a salary. Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 3 warning signs for Proteome Sciences (of which 2 are significant!) 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. 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.