Shareholders Will Probably Not Have Any Issues With Humacyte, Inc.'s (NASDAQ:HUMA) CEO Compensation

Key Insights

• Humacyte's Annual General Meeting to take place on 11th of June
• Total pay for CEO Laura Niklason includes US$603.8k salary
• Total compensation is 37% below industry average
• Humacyte's EPS grew by 136% over the past three years while total shareholder loss over the past three years was 40%

The performance at Humacyte, Inc. (NASDAQ:HUMA) has been rather lacklustre of late and shareholders may be wondering what CEO Laura Niklason is planning to do about this. At the next AGM coming up on 11th of June, they can influence managerial decision making through voting on resolutions, including executive remuneration. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. In our opinion, CEO compensation does not look excessive and we discuss why.

Check out our latest analysis for Humacyte

How Does Total Compensation For Laura Niklason Compare With Other Companies In The Industry?

According to our data, Humacyte, Inc. has a market capitalization of US$878m, and paid its CEO total annual compensation worth US$2.6m over the year to December 2023. That's a notable increase of 50% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$604k.

In comparison with other companies in the American Biotechs industry with market capitalizations ranging from US$400m to US$1.6b, the reported median CEO total compensation was US$4.2m. This suggests that Laura Niklason is paid below the industry median. Furthermore, Laura Niklason directly owns US$9.2m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	US$604k	US$500k	23%
Other	US$2.0m	US$1.2m	77%
Total Compensation	US$2.6m	US$1.7m	100%

Speaking on an industry level, nearly 23% of total compensation represents salary, while the remainder of 77% is other remuneration. Although there is a difference in how total compensation is set, Humacyte more or less reflects the market in terms of setting the salary. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Humacyte, Inc.'s Growth Numbers

Humacyte, Inc.'s earnings per share (EPS) grew 136% per year over the last three years. In the last year, its revenue has collapsed effectively to zero.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 Humacyte, Inc. Been A Good Investment?

With a total shareholder return of -40% over three years, Humacyte, Inc. shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

The fact that shareholders are sitting on a loss is certainly disheartening. This diverges with the robust growth in EPS, suggesting that there is a large discrepancy between share price and fundamentals. A key focus for the board and management will be how to align the share price with fundamentals. In the upcoming AGM, shareholders will get the opportunity to discuss these concerns with the board and assess if the board's plan is likely to improve company performance.

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 is potentially serious) in Humacyte we think you should know about.

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.