The underwhelming share price performance of Catalyst Biosciences, Inc. (NASDAQ:CBIO) in the past three years would have disappointed many shareholders. 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 09 June 2021. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.
Comparing Catalyst Biosciences, Inc.'s CEO Compensation With the industry
According to our data, Catalyst Biosciences, Inc. has a market capitalization of US$133m, and paid its CEO total annual compensation worth US$1.4m over the year to December 2020. Notably, that's an increase of 18% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$574k.
For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$1.2m. So it looks like Catalyst Biosciences compensates Nassim Usman in line with the median for the industry. Moreover, Nassim Usman also holds US$114k worth of Catalyst Biosciences stock directly under their own name.
Speaking on an industry level, nearly 20% of total compensation represents salary, while the remainder of 80% is other remuneration. It's interesting to note that Catalyst Biosciences pays out a greater portion of remuneration through salary, compared to the industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at Catalyst Biosciences, Inc.'s Growth Numbers
Over the past three years, Catalyst Biosciences, Inc. has seen its earnings per share (EPS) grow by 3.5% per year. It saw its revenue drop 63% over the last year.
We generally like to see a little revenue growth, but the modest improvement in EPS is good. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Catalyst Biosciences, Inc. Been A Good Investment?
The return of -82% over three years would not have pleased Catalyst Biosciences, 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. 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.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 3 warning signs (and 1 which can't be ignored) in Catalyst Biosciences we think you should know about.
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. 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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