Shareholders Will Probably Hold Off On Increasing CRISPR Therapeutics AG's (NASDAQ:CRSP) CEO Compensation For The Time Being

Key Insights

• CRISPR Therapeutics' Annual General Meeting to take place on 30th of May
• Total pay for CEO Sam Kulkarni includes US$724.5k salary
• The total compensation is similar to the average for the industry
• Over the past three years, CRISPR Therapeutics' EPS fell by 45% and over the past three years, the total loss to shareholders 52%

The underwhelming share price performance of CRISPR Therapeutics AG (NASDAQ:CRSP) in the past three years would have disappointed many shareholders. Per share earnings growth is also poor, despite revenues growing. The AGM coming up on 30th of May will be an opportunity for shareholders to have their concerns addressed by the board and for them to exercise their influence on management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders might be hesitant about approving a raise at the moment.

Check out our latest analysis for CRISPR Therapeutics

How Does Total Compensation For Sam Kulkarni Compare With Other Companies In The Industry?

Our data indicates that CRISPR Therapeutics AG has a market capitalization of US$4.8b, and total annual CEO compensation was reported as US$12m for the year to December 2023. Notably, that's a decrease of 41% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$725k.

In comparison with other companies in the American Biotechs industry with market capitalizations ranging from US$4.0b to US$12b, the reported median CEO total compensation was US$12m. So it looks like CRISPR Therapeutics compensates Sam Kulkarni in line with the median for the industry. Furthermore, Sam Kulkarni directly owns US$23m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	US$725k	US$700k	6%
Other	US$12m	US$20m	94%
Total Compensation	US$12m	US$21m	100%

On an industry level, roughly 24% of total compensation represents salary and 76% is other remuneration. In CRISPR Therapeutics' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at CRISPR Therapeutics AG's Growth Numbers

Over the last three years, CRISPR Therapeutics AG has shrunk its earnings per share by 45% per year. In the last year, its revenue is up 171%.

Investors would be a bit wary of companies that have lower EPS But in contrast the revenue growth is strong, suggesting future potential for EPS growth. 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 CRISPR Therapeutics AG Been A Good Investment?

Few CRISPR Therapeutics AG shareholders would feel satisfied with the return of -52% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

The company's earnings haven't grown and possibly because of that, the stock has performed poorly, resulting in a loss for the company's shareholders. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 2 warning signs for CRISPR Therapeutics that investors should look into moving forward.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.