We Think Some Shareholders May Hesitate To Increase Aytu BioPharma, Inc.'s (NASDAQ:AYTU) CEO Compensation

Key Insights

• Aytu BioPharma will host its Annual General Meeting on 21st of May
• Total pay for CEO Josh Disbrow includes US$590.0k salary
• The total compensation is similar to the average for the industry
• Aytu BioPharma's EPS grew by 110% over the past three years while total shareholder loss over the past three years was 88%

Our free stock report includes 1 warning sign investors should be aware of before investing in Aytu BioPharma. Read for free now.

The underwhelming share price performance of Aytu BioPharma, Inc. (NASDAQ:AYTU) 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 21st of May. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for Aytu BioPharma

Comparing Aytu BioPharma, Inc.'s CEO Compensation With The Industry

According to our data, Aytu BioPharma, Inc. has a market capitalization of US$7.7m, and paid its CEO total annual compensation worth US$928k over the year to June 2024. We note that's an increase of 31% above last year. In particular, the salary of US$590.0k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the American Pharmaceuticals industry with market capitalizations under US$200m, the reported median total CEO compensation was US$1.0m. So it looks like Aytu BioPharma compensates Josh Disbrow in line with the median for the industry. Moreover, Josh Disbrow also holds US$114k worth of Aytu BioPharma stock directly under their own name.

Component	2024	2023	Proportion (2024)
Salary	US$590k	US$590k	64%
Other	US$338k	US$118k	36%
Total Compensation	US$928k	US$708k	100%

Speaking on an industry level, nearly 26% of total compensation represents salary, while the remainder of 74% is other remuneration. Aytu BioPharma pays out 64% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Aytu BioPharma, Inc.'s Growth Numbers

Aytu BioPharma, Inc.'s earnings per share (EPS) grew 110% per year over the last three years. Its revenue is down 14% over the previous year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. 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 Aytu BioPharma, Inc. Been A Good Investment?

The return of -88% over three years would not have pleased Aytu BioPharma, Inc. shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would be keen to know what's holding the stock back when earnings have grown. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 1 warning sign for Aytu BioPharma that investors should look into moving forward.

Switching gears from Aytu BioPharma, 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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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.