Increases to Shield Therapeutics plc's (LON:STX) CEO Compensation Might Cool off for now

Key Insights

• Shield Therapeutics will host its Annual General Meeting on 20th of June
• CEO Greg Madison's total compensation includes salary of US$722.8k
• The overall pay is 250% above the industry average
• Over the past three years, Shield Therapeutics' EPS fell by 3.8% and over the past three years, the total loss to shareholders 96%

The underwhelming share price performance of Shield Therapeutics plc (LON:STX) in the past three years would have disappointed many shareholders. Per share earnings growth is also lacking, despite revenue growth. Shareholders will have a chance to take their concerns to the board at the next AGM on 20th of June and vote on resolutions including executive compensation, which studies show may have an impact on company performance. We think shareholders may be cautious of approving a pay rise for the CEO at the moment, based on our analysis below.

Check out our latest analysis for Shield Therapeutics

Comparing Shield Therapeutics plc's CEO Compensation With The Industry

According to our data, Shield Therapeutics plc has a market capitalization of UK£16m, and paid its CEO total annual compensation worth US$1.3m over the year to December 2023. Notably, that's an increase of 30% over the year before. In particular, the salary of US$722.8k, makes up a fairly large portion of the total compensation being paid to the CEO.

In comparison with other companies in the British Pharmaceuticals industry with market capitalizations under UK£156m, the reported median total CEO compensation was US$376k. Accordingly, our analysis reveals that Shield Therapeutics plc pays Greg Madison north of the industry median.

Component	2023	2022	Proportion (2023)
Salary	US$723k	US$604k	55%
Other	US$593k	US$405k	45%
Total Compensation	US$1.3m	US$1.0m	100%

On an industry level, roughly 66% of total compensation represents salary and 34% is other remuneration. Shield Therapeutics pays a modest slice of remuneration through salary, as compared to the broader industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Shield Therapeutics plc's Growth

Over the last three years, Shield Therapeutics plc has shrunk its earnings per share by 3.8% per year. Its revenue is up 138% over the last year.

The decrease in EPS could be a concern for some investors. But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Shield Therapeutics plc Been A Good Investment?

Few Shield Therapeutics plc shareholders would feel satisfied with the return of -96% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

The company's earnings haven't grown and possibly because of that, the stock has performed poorly, resulting in a loss for the company's shareholders. Shareholders will get the chance at the upcoming AGM 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 identified 4 warning signs for Shield Therapeutics (2 are potentially serious!) that you should be aware of before investing here.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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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.