Increases to CEO Compensation Might Be Put On Hold For Now at MEI Pharma, Inc. (NASDAQ:MEIP)

Key Insights

• MEI Pharma to hold its Annual General Meeting on 05 January 2023
• CEO Dan Gold's total compensation includes salary of US$716.6k
• Total compensation is 45% above industry average
• MEI Pharma's EPS grew by -13% over the past three years while total shareholder return over the past three years was -89%

Shareholders of MEI Pharma, Inc. (NASDAQ:MEIP) will have been dismayed by the negative share price return over the last three years. Per share earnings growth is also lacking, despite revenue growth. The AGM coming up on 05 January 2023 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.

See our latest analysis for MEI Pharma

Comparing MEI Pharma, Inc.'s CEO Compensation With The Industry

According to our data, MEI Pharma, Inc. has a market capitalization of US$34m, and paid its CEO total annual compensation worth US$2.5m over the year to June 2022. That's a notable decrease of 14% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$717k.

For comparison, other companies in the American Biotechs industry with market capitalizations below US$200m, reported a median total CEO compensation of US$1.7m. Hence, we can conclude that Dan Gold is remunerated higher than the industry median. Furthermore, Dan Gold directly owns US$106k worth of shares in the company.

Component	2022	2021	Proportion (2022)
Salary	US$717k	US$683k	28%
Other	US$1.8m	US$2.3m	72%
Total Compensation	US$2.5m	US$2.9m	100%

On an industry level, around 15% of total compensation represents salary and 85% is other remuneration. According to our research, MEI Pharma has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

MEI Pharma, Inc.'s Growth

Over the last three years, MEI Pharma, Inc. has shrunk its earnings per share by 13% per year. It achieved revenue growth of 16% over the last year.

The decrease in EPS could be a concern for some investors. But on the other hand, revenue growth is strong, suggesting a brighter future. 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 MEI Pharma, Inc. Been A Good Investment?

Few MEI Pharma, Inc. shareholders would feel satisfied with the return of -89% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

The loss to shareholders over the past three years is certainly concerning and possibly has something to do with the fact that the company's earnings haven't grown. 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 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 3 warning signs for MEI Pharma that investors should think about before committing capital to this stock.

Switching gears from MEI Pharma, 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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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.