Here's Why Shareholders Should Examine Corbus Pharmaceuticals Holdings, Inc.'s (NASDAQ:CRBP) CEO Compensation Package More Closely

The results at Corbus Pharmaceuticals Holdings, Inc. (NASDAQ:CRBP) have been quite disappointing recently and CEO Yuval Cohen bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 17 June 2021. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

Check out our latest analysis for Corbus Pharmaceuticals Holdings

How Does Total Compensation For Yuval Cohen Compare With Other Companies In The Industry?

Our data indicates that Corbus Pharmaceuticals Holdings, Inc. has a market capitalization of US$273m, and total annual CEO compensation was reported as US$2.9m for the year to December 2020. That's a notable decrease of 28% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$559k.

On examining similar-sized companies in the industry with market capitalizations between US$100m and US$400m, we discovered that the median CEO total compensation of that group was US$1.7m. This suggests that Yuval Cohen is paid more than the median for the industry. What's more, Yuval Cohen holds US$164k worth of shares in the company in their own name.

Component	2020	2019	Proportion (2020)
Salary	US$559k	US$559k	19%
Other	US$2.3m	US$3.4m	81%
Total Compensation	US$2.9m	US$4.0m	100%

On an industry level, around 20% of total compensation represents salary and 80% is other remuneration. Our data reveals that Corbus Pharmaceuticals Holdings allocates salary more or less in line with the wider market. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Corbus Pharmaceuticals Holdings, Inc.'s Growth

Corbus Pharmaceuticals Holdings, Inc. has reduced its earnings per share by 22% a year over the last three years. In the last year, its revenue is down 92%.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Corbus Pharmaceuticals Holdings, Inc. Been A Good Investment?

The return of -64% over three years would not have pleased Corbus Pharmaceuticals Holdings, Inc. shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 4 warning signs (and 1 which doesn't sit too well with us) in Corbus Pharmaceuticals Holdings we think you should know about.

Switching gears from Corbus Pharmaceuticals Holdings, 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. 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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