Shareholders May Not Be So Generous With Global Blood Therapeutics, Inc.'s (NASDAQ:GBT) CEO Compensation And Here's Why

Under the guidance of CEO Ted Love, Global Blood Therapeutics, Inc. (NASDAQ:GBT) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 17 June 2021. However, some shareholders may still want to keep CEO compensation within reason.

See our latest analysis for Global Blood Therapeutics

How Does Total Compensation For Ted Love Compare With Other Companies In The Industry?

Our data indicates that Global Blood Therapeutics, Inc. has a market capitalization of US$2.5b, and total annual CEO compensation was reported as US$18m for the year to December 2020. We note that's an increase of 74% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$661k.

In comparison with other companies in the industry with market capitalizations ranging from US$2.0b to US$6.4b, the reported median CEO total compensation was US$6.8m. This suggests that Ted Love is paid more than the median for the industry. Furthermore, Ted Love directly owns US$44m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2020	2019	Proportion (2020)
Salary	US$661k	US$597k	4%
Other	US$17m	US$9.5m	96%
Total Compensation	US$18m	US$10m	100%

Speaking on an industry level, nearly 20% of total compensation represents salary, while the remainder of 80% is other remuneration. Interestingly, the company has chosen to go down an unconventional route in that it pays a smaller salary to Ted Love as compared to non-salary compensation over the one-year period examined. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Global Blood Therapeutics, Inc.'s Growth

Global Blood Therapeutics, Inc. has reduced its earnings per share by 13% a year over the last three years. In the last year, its revenue is up 817%.

The reduction in EPS, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Global Blood Therapeutics, Inc. Been A Good Investment?

Global Blood Therapeutics, Inc. has not done too badly by shareholders, with a total return of 1.5%, over three years. It would be nice to see that metric improve in the future. Accordingly, a proposal to increase CEO remuneration without seeing an improvement in shareholder returns might not be met favorably by most shareholders.

In Summary...

Global Blood Therapeutics primarily uses non-salary benefits to reward its CEO. Some shareholders will be pleased by the relatively good results, however, the results could still be improved. We still think that some shareholders will be hesitant of increasing CEO pay until EPS growth improves, since they are already paid higher than the industry.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Global Blood Therapeutics that you should be aware of before investing.

Switching gears from Global Blood Therapeutics, 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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