Here's What We Think About Enzo Biochem's (NYSE:ENZ) CEO Pay

This article will reflect on the compensation paid to Elazar Rabbani who has served as CEO of Enzo Biochem, Inc. (NYSE:ENZ) since 1976. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Enzo Biochem.

See our latest analysis for Enzo Biochem

Comparing Enzo Biochem, Inc.'s CEO Compensation With the industry

At the time of writing, our data shows that Enzo Biochem, Inc. has a market capitalization of US$122m, and reported total annual CEO compensation of US$1.5m for the year to July 2020. That's mostly flat as compared to the prior year's compensation. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$611k.

In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$427k. Hence, we can conclude that Elazar Rabbani is remunerated higher than the industry median. Furthermore, Elazar Rabbani directly owns US$4.3m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 17% of total compensation represents salary, while the remainder of 83% is other remuneration. Enzo Biochem is paying a higher share of its remuneration through a salary in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Enzo Biochem, Inc.'s Growth

Over the last three years, Enzo Biochem, Inc. has shrunk its earnings per share by 51% per year. It achieved revenue growth of 5.4% over the last year.

The decline in EPS is a bit concerning. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Enzo Biochem, Inc. Been A Good Investment?

Given the total shareholder loss of 71% over three years, many shareholders in Enzo Biochem, Inc. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As we noted earlier, Enzo Biochem pays its CEO higher than the norm for similar-sized companies belonging to the same industry. This doesn't look good against shareholder returns, which have been negative for the past three years. Add to that declining EPS growth, and you have the perfect recipe for shareholder irritation. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 2 warning signs (and 1 which is concerning) in Enzo Biochem we think you should know about.

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This article by Simply Wall St is general in nature. 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.
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