We Discuss Why Moderna, Inc.'s (NASDAQ:MRNA) CEO Compensation May Be Closely Reviewed

Key Insights

• Moderna to hold its Annual General Meeting on 6th of May
• Total pay for CEO Stephane Bancel includes US$1.56m salary
• The overall pay is comparable to the industry average
• Moderna's three-year loss to shareholders was 40% while its EPS was down 23% over the past three years

The results at Moderna, Inc. (NASDAQ:MRNA) have been quite disappointing recently and CEO Stephane Bancel bears some responsibility for this. At the upcoming AGM on 6th of May, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. From our analysis, we think CEO compensation may need a review in light of the recent performance.

View our latest analysis for Moderna

How Does Total Compensation For Stephane Bancel Compare With Other Companies In The Industry?

According to our data, Moderna, Inc. has a market capitalization of US$41b, and paid its CEO total annual compensation worth US$17m over the year to December 2023. Notably, that's a decrease of 12% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.6m.

In comparison with other companies in the American Biotechs industry with market capitalizations over US$8.0b, the reported median total CEO compensation was US$17m. So it looks like Moderna compensates Stephane Bancel in line with the median for the industry. Furthermore, Stephane Bancel directly owns US$2.4b worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	US$1.6m	US$1.4m	9%
Other	US$16m	US$18m	91%
Total Compensation	US$17m	US$19m	100%

On an industry level, around 24% of total compensation represents salary and 76% is other remuneration. In Moderna's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. 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 Moderna, Inc.'s Growth Numbers

Over the last three years, Moderna, Inc. has shrunk its earnings per share by 23% per year. Its revenue is down 64% over the previous year.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Moderna, Inc. Been A Good Investment?

The return of -40% over three years would not have pleased Moderna, Inc. shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 1 warning sign for Moderna that investors should be aware of in a dynamic business environment.

Important note: Moderna is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.