Shareholders May Find It Hard To Justify Increasing AcelRx Pharmaceuticals, Inc.'s (NASDAQ:ACRX) CEO Compensation For Now

The underwhelming share price performance of AcelRx Pharmaceuticals, Inc. (NASDAQ:ACRX) in the past three years would have disappointed many shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 17 June 2021. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

View our latest analysis for AcelRx Pharmaceuticals

How Does Total Compensation For Vince Angotti Compare With Other Companies In The Industry?

Our data indicates that AcelRx Pharmaceuticals, Inc. has a market capitalization of US$180m, and total annual CEO compensation was reported as US$1.8m for the year to December 2020. That's a notable decrease of 17% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$637k.

In comparison with other companies in the industry with market capitalizations ranging from US$100m to US$400m, the reported median CEO total compensation was US$1.7m. So it looks like AcelRx Pharmaceuticals compensates Vince Angotti in line with the median for the industry. Moreover, Vince Angotti also holds US$358k worth of AcelRx Pharmaceuticals stock directly under their own name.

Component	2020	2019	Proportion (2020)
Salary	US$637k	US$618k	36%
Other	US$1.1m	US$1.5m	64%
Total Compensation	US$1.8m	US$2.1m	100%

On an industry level, around 28% of total compensation represents salary and 72% is other remuneration. AcelRx Pharmaceuticals pays out 36% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at AcelRx Pharmaceuticals, Inc.'s Growth Numbers

AcelRx Pharmaceuticals, Inc.'s earnings per share (EPS) grew 24% per year over the last three years. In the last year, its revenue is up 130%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. 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 AcelRx Pharmaceuticals, Inc. Been A Good Investment?

Few AcelRx Pharmaceuticals, Inc. shareholders would feel satisfied with the return of -64% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would be keen to know what's holding the stock back when earnings have grown. 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. In our study, we found 3 warning signs for AcelRx Pharmaceuticals you should be aware of, and 1 of them is potentially serious.

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. 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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