Shareholders May Be More Conservative With Coherus BioSciences, Inc.'s (NASDAQ:CHRS) CEO Compensation For Now

Key Insights

• Coherus BioSciences to hold its Annual General Meeting on 29th of May
• Total pay for CEO Denny Lanfear includes US$982.9k salary
• The total compensation is 123% higher than the average for the industry
• Coherus BioSciences' three-year loss to shareholders was 84% while its EPS grew by 2.6% over the past three years

The underwhelming share price performance of Coherus BioSciences, Inc. (NASDAQ:CHRS) 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. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 29th 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 Coherus BioSciences

Comparing Coherus BioSciences, Inc.'s CEO Compensation With The Industry

At the time of writing, our data shows that Coherus BioSciences, Inc. has a market capitalization of US$239m, and reported total annual CEO compensation of US$5.9m for the year to December 2023. We note that's a decrease of 14% compared to last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$983k.

For comparison, other companies in the American Biotechs industry with market capitalizations ranging between US$100m and US$400m had a median total CEO compensation of US$2.6m. This suggests that Denny Lanfear is paid more than the median for the industry. What's more, Denny Lanfear holds US$2.4m worth of shares in the company in their own name.

Component	2023	2022	Proportion (2023)
Salary	US$983k	US$945k	17%
Other	US$4.9m	US$5.9m	83%
Total Compensation	US$5.9m	US$6.9m	100%

On an industry level, roughly 24% of total compensation represents salary and 76% is other remuneration. In Coherus BioSciences' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Coherus BioSciences, Inc.'s Growth Numbers

Coherus BioSciences, Inc.'s earnings per share (EPS) grew 2.6% per year over the last three years. It achieved revenue growth of 65% over the last year.

We like the look of the strong year-on-year improvement in revenue. And in that context, the modest EPS improvement certainly isn't shabby. We'd stop short of saying the business performance is amazing, but there are enough positives to justify further research, or even adding the stock to your watch-list. 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 Coherus BioSciences, Inc. Been A Good Investment?

Few Coherus BioSciences, Inc. shareholders would feel satisfied with the return of -84% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. 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. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 2 warning signs for Coherus BioSciences (1 is significant!) that you should be aware of before investing here.

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.