Aurinia Pharmaceuticals Inc.'s (NASDAQ:AUPH) CEO Will Probably Find It Hard To See A Huge Raise This Year

Key Insights

• Aurinia Pharmaceuticals to hold its Annual General Meeting on 15th of May
• CEO Peter Greenleaf's total compensation includes salary of US$822.9k
• The overall pay is comparable to the industry average
• Over the past three years, Aurinia Pharmaceuticals' EPS grew by 63% and over the past three years, the total loss to shareholders 18%

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Shareholders of Aurinia Pharmaceuticals Inc. (NASDAQ:AUPH) 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. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 15th of May. 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.

Check out our latest analysis for Aurinia Pharmaceuticals

Comparing Aurinia Pharmaceuticals Inc.'s CEO Compensation With The Industry

At the time of writing, our data shows that Aurinia Pharmaceuticals Inc. has a market capitalization of US$1.1b, and reported total annual CEO compensation of US$6.4m for the year to December 2024. We note that's a decrease of 39% compared to last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$823k.

On examining similar-sized companies in the American Biotechs industry with market capitalizations between US$400m and US$1.6b, we discovered that the median CEO total compensation of that group was US$7.0m. So it looks like Aurinia Pharmaceuticals compensates Peter Greenleaf in line with the median for the industry. Moreover, Peter Greenleaf also holds US$5.4m worth of Aurinia Pharmaceuticals stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, roughly 22% of total compensation represents salary and 78% is other remuneration. In Aurinia Pharmaceuticals' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Aurinia Pharmaceuticals Inc.'s Growth

Over the past three years, Aurinia Pharmaceuticals Inc. has seen its earnings per share (EPS) grow by 63% per year. Its revenue is up 34% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Aurinia Pharmaceuticals Inc. Been A Good Investment?

Given the total shareholder loss of 18% over three years, many shareholders in Aurinia Pharmaceuticals Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

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 probably be keen to find out what are the other factors could be weighing down the stock. 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 CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 2 warning signs for Aurinia Pharmaceuticals that investors should look into moving forward.

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.