Here's Why Altimmune, Inc.'s (NASDAQ:ALT) CEO Compensation Is The Least Of Shareholders Concerns

The performance at Altimmune, Inc. (NASDAQ:ALT) has been rather lacklustre of late and shareholders may be wondering what CEO Vipin Garg is planning to do about this. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 23 September 2021. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. In our opinion, CEO compensation does not look excessive and we discuss why.

View our latest analysis for Altimmune

How Does Total Compensation For Vipin Garg Compare With Other Companies In The Industry?

Our data indicates that Altimmune, Inc. has a market capitalization of US$649m, and total annual CEO compensation was reported as US$1.4m for the year to December 2020. We note that's an increase of 76% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$514k.

For comparison, other companies in the same industry with market capitalizations ranging between US$400m and US$1.6b had a median total CEO compensation of US$3.0m. That is to say, Vipin Garg is paid under the industry median. Moreover, Vipin Garg also holds US$4.8m worth of Altimmune stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2020	2019	Proportion (2020)
Salary	US$514k	US$500k	36%
Other	US$920k	US$315k	64%
Total Compensation	US$1.4m	US$815k	100%

Talking in terms of the industry, salary represented approximately 20% of total compensation out of all the companies we analyzed, while other remuneration made up 80% of the pie. Altimmune pays out 36% of remuneration in the form of a salary, significantly higher than the industry average. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Altimmune, Inc.'s Growth

Over the past three years, Altimmune, Inc. has seen its earnings per share (EPS) grow by 129% per year. It achieved revenue growth of 50% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Altimmune, Inc. Been A Good Investment?

The return of -37% over three years would not have pleased Altimmune, Inc. shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

The loss to shareholders over the past three years is certainly concerning. The share price trend has diverged with the robust growth in EPS however, suggesting there may be other factors that could be driving the price performance. A key question may be why the fundamentals have not yet been reflected into the share price. In the upcoming AGM, shareholders should take this opportunity to raise these concerns with the board 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 4 warning signs for Altimmune you should be aware of, and 1 of them doesn't sit too well with us.

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. 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.
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