Stock Analysis

We Think Some Shareholders May Hesitate To Increase Nabriva Therapeutics plc's (NASDAQ:NBRV) CEO Compensation

  •  Updated
Source: Shutterstock

The underwhelming share price performance of Nabriva Therapeutics plc (NASDAQ:NBRV) 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. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 28 July 2021. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. 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 Nabriva Therapeutics

Comparing Nabriva Therapeutics plc's CEO Compensation With the industry

Our data indicates that Nabriva Therapeutics plc has a market capitalization of US$58m, and total annual CEO compensation was reported as US$1.7m for the year to December 2020. We note that's an increase of 11% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$577k.

On comparing similar-sized companies in the industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$695k. Accordingly, our analysis reveals that Nabriva Therapeutics plc pays Ted Schroeder north of the industry median. Moreover, Ted Schroeder also holds US$209k worth of Nabriva Therapeutics stock directly under their own name.

Component20202019Proportion (2020)
Salary US$577k US$560k 35%
Other US$1.1m US$936k 65%
Total CompensationUS$1.7m US$1.5m100%

On an industry level, around 28% of total compensation represents salary and 72% is other remuneration. It's interesting to note that Nabriva Therapeutics pays out a greater portion of remuneration through salary, compared to the industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

NasdaqGS:NBRV CEO Compensation July 22nd 2021

Nabriva Therapeutics plc's Growth

Nabriva Therapeutics plc has seen its earnings per share (EPS) increase by 50% a year over the past three years. It saw its revenue drop 21% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 Nabriva Therapeutics plc Been A Good Investment?

With a total shareholder return of -97% over three years, Nabriva Therapeutics plc shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. 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. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

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 5 warning signs for Nabriva Therapeutics (of which 2 are significant!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Nabriva Therapeutics, 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.

When trading Nabriva Therapeutics or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

Valuation is complex, but we're helping make it simple.

Find out whether Nabriva Therapeutics is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis