Here's Why It's Unlikely That Intellia Therapeutics, Inc.'s (NASDAQ:NTLA) CEO Will See A Pay Rise This Year

Key Insights

• Intellia Therapeutics will host its Annual General Meeting on 12th of June
• Total pay for CEO John Leonard includes US$660.0k salary
• The overall pay is 62% above the industry average
• Intellia Therapeutics' three-year loss to shareholders was 71% while its EPS was down 20% over the past three years

The results at Intellia Therapeutics, Inc. (NASDAQ:NTLA) have been quite disappointing recently and CEO John Leonard bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 12th of June. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Check out our latest analysis for Intellia Therapeutics

How Does Total Compensation For John Leonard Compare With Other Companies In The Industry?

Our data indicates that Intellia Therapeutics, Inc. has a market capitalization of US$2.2b, and total annual CEO compensation was reported as US$12m for the year to December 2023. We note that's an increase of 15% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$660k.

In comparison with other companies in the American Biotechs industry with market capitalizations ranging from US$1.0b to US$3.2b, the reported median CEO total compensation was US$7.2m. Hence, we can conclude that John Leonard is remunerated higher than the industry median. Furthermore, John Leonard directly owns US$19m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	US$660k	US$630k	6%
Other	US$11m	US$9.5m	94%
Total Compensation	US$12m	US$10m	100%

Talking in terms of the industry, salary represented approximately 23% of total compensation out of all the companies we analyzed, while other remuneration made up 77% of the pie. It's interesting to note that Intellia Therapeutics allocates a smaller portion of compensation to salary 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.

Intellia Therapeutics, Inc.'s Growth

Over the last three years, Intellia Therapeutics, Inc. has shrunk its earnings per share by 20% per year. In the last year, its revenue is down 1.6%.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Intellia Therapeutics, Inc. Been A Good Investment?

The return of -71% over three years would not have pleased Intellia Therapeutics, Inc. shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Intellia Therapeutics that investors should think about before committing capital to this 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.