Most Shareholders Will Probably Find That The CEO Compensation For Biomerica, Inc. (NASDAQ:BMRA) Is Reasonable

By
Simply Wall St
Published
December 02, 2021
NasdaqCM:BMRA
Source: Shutterstock

Despite strong share price growth of 66% for Biomerica, Inc. (NASDAQ:BMRA) over the last few years, earnings growth has been disappointing, which suggests something is amiss. The upcoming AGM on 09 December 2021 may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

View our latest analysis for Biomerica

How Does Total Compensation For Zackary Irani Compare With Other Companies In The Industry?

Our data indicates that Biomerica, Inc. has a market capitalization of US$55m, and total annual CEO compensation was reported as US$488k for the year to May 2021. That's a notable increase of 48% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$137k.

In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$585k. From this we gather that Zackary Irani is paid around the median for CEOs in the industry. What's more, Zackary Irani holds US$4.5m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20212020Proportion (2021)
Salary US$137k US$137k 28%
Other US$352k US$194k 72%
Total CompensationUS$488k US$330k100%

On an industry level, around 22% of total compensation represents salary and 78% is other remuneration. It's interesting to note that Biomerica pays out a greater portion of remuneration through salary, compared to the industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
NasdaqCM:BMRA CEO Compensation December 3rd 2021

Biomerica, Inc.'s Growth

Over the last three years, Biomerica, Inc. has shrunk its earnings per share by 34% per year. In the last year, its revenue is up 10%.

Few shareholders would be pleased to read that EPS have declined. While the revenue growth is good to see, it is outweighed by the fact that EPS are down, over three years. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Biomerica, Inc. Been A Good Investment?

Boasting a total shareholder return of 66% over three years, Biomerica, Inc. has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

Although shareholders would be quite happy with the returns they have earned on their initial investment, earnings have failed to grow and this could mean returns may be hard to keep up. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 4 warning signs for Biomerica that you should be aware of before investing.

Switching gears from Biomerica, 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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