Shareholders of ADMA Biologics, Inc. (NASDAQ:ADMA) will have been dismayed by the negative share price return over the last three years. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 27 May 2021. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.
How Does Total Compensation For Adam Grossman Compare With Other Companies In The Industry?
At the time of writing, our data shows that ADMA Biologics, Inc. has a market capitalization of US$226m, and reported total annual CEO compensation of US$2.0m for the year to December 2020. Notably, that's an increase of 15% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$600k.
On comparing similar companies from the same industry with market caps ranging from US$100m to US$400m, we found that the median CEO total compensation was US$1.7m. So it looks like ADMA Biologics compensates Adam Grossman in line with the median for the industry. Furthermore, Adam Grossman directly owns US$1.7m worth of shares in the company.
Talking in terms of the industry, salary represented approximately 19% of total compensation out of all the companies we analyzed, while other remuneration made up 81% of the pie. It's interesting to note that ADMA Biologics pays out a greater portion of remuneration through salary, compared to the industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
ADMA Biologics, Inc.'s Growth
ADMA Biologics, Inc. has seen its earnings per share (EPS) increase by 28% a year over the past three years. In the last year, its revenue is up 33%.
Shareholders would be glad to know that the company has improved itself over the last few years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has ADMA Biologics, Inc. Been A Good Investment?
The return of -67% over three years would not have pleased ADMA Biologics, Inc. shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
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 be keen to know what's holding the stock back when earnings have grown. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 3 warning signs for ADMA Biologics that investors should think about before committing capital to this stock.
Switching gears from ADMA Biologics, 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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