Here's Why Shareholders May Want To Be Cautious With Increasing Karyopharm Therapeutics Inc.'s (NASDAQ:KPTI) CEO Pay Packet

Key Insights

• Karyopharm Therapeutics' Annual General Meeting to take place on 28th of May
• CEO Richard Paulson's total compensation includes salary of US$769.6k
• The overall pay is 47% above the industry average
• Karyopharm Therapeutics' three-year loss to shareholders was 94% while its EPS grew by 28% over the past three years

We've discovered 6 warning signs about Karyopharm Therapeutics. View them for free.

The underwhelming share price performance of Karyopharm Therapeutics Inc. (NASDAQ:KPTI) in the past three years would have disappointed many shareholders. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. The AGM coming up on the 28th of May could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

See our latest analysis for Karyopharm Therapeutics

Comparing Karyopharm Therapeutics Inc.'s CEO Compensation With The Industry

At the time of writing, our data shows that Karyopharm Therapeutics Inc. has a market capitalization of US$45m, and reported total annual CEO compensation of US$2.1m for the year to December 2024. Notably, that's a decrease of 21% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$770k.

On comparing similar-sized companies in the American Biotechs industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$1.4m. This suggests that Richard Paulson is paid more than the median for the industry. What's more, Richard Paulson holds US$152k worth of shares in the company in their own name.

On an industry level, roughly 21% of total compensation represents salary and 79% is other remuneration. Karyopharm Therapeutics pays out 37% of remuneration in the form of a salary, significantly higher than the industry average. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Karyopharm Therapeutics Inc.'s Growth Numbers

Karyopharm Therapeutics Inc.'s earnings per share (EPS) grew 28% per year over the last three years. It achieved revenue growth of 1.2% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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 Karyopharm Therapeutics Inc. Been A Good Investment?

With a total shareholder return of -94% over three years, Karyopharm Therapeutics Inc. shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. 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.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 6 warning signs for Karyopharm Therapeutics (of which 3 are a bit concerning!) that you should know about in order to have a holistic understanding of the 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.