Most Shareholders Will Probably Find That The Compensation For Benitec Biopharma Inc.'s (NASDAQ:BNTC) CEO Is Reasonable

Key Insights

• Benitec Biopharma will host its Annual General Meeting on 6th of December
• CEO Jerel Banks' total compensation includes salary of US$539.5k
• The total compensation is 33% less than the average for the industry
• Benitec Biopharma's three-year loss to shareholders was 94% while its EPS grew by 72% over the past three years

Shareholders may be wondering what CEO Jerel Banks plans to do to improve the less than great performance at Benitec Biopharma Inc. (NASDAQ:BNTC) recently. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 6th of December. 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.

See our latest analysis for Benitec Biopharma

How Does Total Compensation For Jerel Banks Compare With Other Companies In The Industry?

According to our data, Benitec Biopharma Inc. has a market capitalization of US$7.8m, and paid its CEO total annual compensation worth US$919k over the year to June 2023. Notably, that's an increase of 15% over the year before. In particular, the salary of US$539.5k, makes up a fairly large portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the American Biotechs industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$1.4m. That is to say, Jerel Banks is paid under the industry median.

Component	2023	2022	Proportion (2023)
Salary	US$540k	US$506k	59%
Other	US$379k	US$294k	41%
Total Compensation	US$919k	US$800k	100%

On an industry level, roughly 23% of total compensation represents salary and 77% is other remuneration. Benitec Biopharma is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Benitec Biopharma Inc.'s Growth

Benitec Biopharma Inc. has seen its earnings per share (EPS) increase by 72% a year over the past three years. It achieved revenue growth of 2.7% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. 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 Benitec Biopharma Inc. Been A Good Investment?

The return of -94% over three years would not have pleased Benitec Biopharma Inc. shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

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.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 5 warning signs for Benitec Biopharma that investors should be aware of in a dynamic business environment.

Important note: Benitec Biopharma is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.