Shareholders May Not Be So Generous With G1 Therapeutics, Inc.'s (NASDAQ:GTHX) CEO Compensation And Here's Why

Key Insights

• G1 Therapeutics to hold its Annual General Meeting on 13th of June
• CEO Jack Bailey's total compensation includes salary of US$795.0k
• The total compensation is similar to the average for the industry
• G1 Therapeutics' three-year loss to shareholders was 86% while its EPS grew by 30% over the past three years

Shareholders of G1 Therapeutics, Inc. (NASDAQ:GTHX) will have been dismayed by the negative share price return over the last three years. 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 13th of June. 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.

Check out our latest analysis for G1 Therapeutics

Comparing G1 Therapeutics, Inc.'s CEO Compensation With The Industry

Our data indicates that G1 Therapeutics, Inc. has a market capitalization of US$168m, and total annual CEO compensation was reported as US$3.3m for the year to December 2023. That's just a smallish increase of 7.8% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$795k.

In comparison with other companies in the American Biotechs industry with market capitalizations ranging from US$100m to US$400m, the reported median CEO total compensation was US$2.6m. From this we gather that Jack Bailey is paid around the median for CEOs in the industry. Moreover, Jack Bailey also holds US$559k worth of G1 Therapeutics stock directly under their own name.

Component	2023	2022	Proportion (2023)
Salary	US$795k	US$764k	24%
Other	US$2.5m	US$2.3m	76%
Total Compensation	US$3.3m	US$3.0m	100%

Talking in terms of the industry, salary represented approximately 23% of total compensation out of all the companies we analyzed, while other remuneration made up 77% of the pie. Our data reveals that G1 Therapeutics 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.

G1 Therapeutics, Inc.'s Growth

G1 Therapeutics, Inc.'s earnings per share (EPS) grew 30% per year over the last three years. Its revenue is up 47% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. 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 G1 Therapeutics, Inc. Been A Good Investment?

The return of -86% over three years would not have pleased G1 Therapeutics, Inc. shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for G1 Therapeutics that investors should think about before committing capital to this stock.

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.