Shareholders May Be More Conservative With Femasys Inc.'s (NASDAQ:FEMY) CEO Compensation For Now

Key Insights

• Femasys to hold its Annual General Meeting on 12th of July
• Salary of US$500.0k is part of CEO Kathy Lee-Sepsick's total remuneration
• The overall pay is 55% above the industry average
• Over the past three years, Femasys' EPS grew by 73% and over the past three years, the total loss to shareholders 85%

The underwhelming share price performance of Femasys Inc. (NASDAQ:FEMY) in the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 12th of July. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Femasys

How Does Total Compensation For Kathy Lee-Sepsick Compare With Other Companies In The Industry?

According to our data, Femasys Inc. has a market capitalization of US$24m, and paid its CEO total annual compensation worth US$1.0m over the year to December 2023. We note that's an increase of 55% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$500k.

On comparing similar-sized companies in the American Medical Equipment industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$658k. Accordingly, our analysis reveals that Femasys Inc. pays Kathy Lee-Sepsick north of the industry median. Furthermore, Kathy Lee-Sepsick directly owns US$385k worth of shares in the company.

Component	2023	2022	Proportion (2023)
Salary	US$500k	US$423k	49%
Other	US$519k	US$236k	51%
Total Compensation	US$1.0m	US$659k	100%

Talking in terms of the industry, salary represented approximately 24% of total compensation out of all the companies we analyzed, while other remuneration made up 76% of the pie. Femasys is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Femasys Inc.'s Growth

Femasys Inc.'s earnings per share (EPS) grew 73% per year over the last three years. Its revenue is down 11% over the previous year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Femasys Inc. Been A Good Investment?

Few Femasys Inc. shareholders would feel satisfied with the return of -85% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. 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. That's why we did our research, and identified 5 warning signs for Femasys (of which 1 doesn't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Femasys, 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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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com