Shareholders May Be Wary Of Increasing Fulgent Genetics, Inc.'s (NASDAQ:FLGT) CEO Compensation Package

Key Insights

• Fulgent Genetics will host its Annual General Meeting on 16th of May
• CEO Ming Hsieh's total compensation includes salary of US$1.00m
• Total compensation is 89% above industry average
• Fulgent Genetics' three-year loss to shareholders was 68% while its EPS was down 97% over the past three years

The results at Fulgent Genetics, Inc. (NASDAQ:FLGT) have been quite disappointing recently and CEO Ming Hsieh bears some responsibility for this. At the upcoming AGM on 16th of May, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.

View our latest analysis for Fulgent Genetics

How Does Total Compensation For Ming Hsieh Compare With Other Companies In The Industry?

Our data indicates that Fulgent Genetics, Inc. has a market capitalization of US$636m, and total annual CEO compensation was reported as US$5.3m for the year to December 2023. That is, the compensation was roughly the same as last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.0m.

On examining similar-sized companies in the American Healthcare industry with market capitalizations between US$400m and US$1.6b, we discovered that the median CEO total compensation of that group was US$2.8m. Accordingly, our analysis reveals that Fulgent Genetics, Inc. pays Ming Hsieh north of the industry median. What's more, Ming Hsieh holds US$190m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	US$1.0m	US$948k	19%
Other	US$4.3m	US$4.3m	81%
Total Compensation	US$5.3m	US$5.2m	100%

Speaking on an industry level, nearly 21% of total compensation represents salary, while the remainder of 79% is other remuneration. It's interesting to note that Fulgent Genetics allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Fulgent Genetics, Inc.'s Growth

Over the last three years, Fulgent Genetics, Inc. has shrunk its earnings per share by 97% per year. In the last year, its revenue is down 21%.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Fulgent Genetics, Inc. Been A Good Investment?

Few Fulgent Genetics, Inc. shareholders would feel satisfied with the return of -68% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

So you may want to check if insiders are buying Fulgent Genetics shares with their own money (free access).

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.