Most Shareholders Will Probably Find That The Compensation For Nutriband Inc.'s (NASDAQ:NTRB) CEO Is Reasonable

Key Insights

• Nutriband will host its Annual General Meeting on 23rd of January
• Total pay for CEO Gareth Sheridan includes US$150.0k salary
• The total compensation is 70% less than the average for the industry
• Nutriband's EPS grew by 1.3% over the past three years while total shareholder loss over the past three years was 15%

Performance at Nutriband Inc. (NASDAQ:NTRB) has been rather uninspiring recently and shareholders may be wondering how CEO Gareth Sheridan plans to fix this. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 23rd of January. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. In our opinion, CEO compensation does not look excessive and we discuss why.

See our latest analysis for Nutriband

Comparing Nutriband Inc.'s CEO Compensation With The Industry

According to our data, Nutriband Inc. has a market capitalization of US$47m, and paid its CEO total annual compensation worth US$257k over the year to January 2024. Notably, that's a decrease of 32% over the year before. We note that the salary of US$150.0k makes up a sizeable portion of the total compensation received by the CEO.

For comparison, other companies in the American Pharmaceuticals industry with market capitalizations below US$200m, reported a median total CEO compensation of US$861k. Accordingly, Nutriband pays its CEO under the industry median. What's more, Gareth Sheridan holds US$7.2m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	US$150k	US$200k	58%
Other	US$107k	US$179k	42%
Total Compensation	US$257k	US$379k	100%

On an industry level, roughly 30% of total compensation represents salary and 70% is other remuneration. Nutriband pays out 58% of remuneration in the form of a salary, significantly higher than the industry average. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Nutriband Inc.'s Growth Numbers

Nutriband Inc.'s earnings per share (EPS) grew 1.3% per year over the last three years. It saw its revenue drop 3.2% over the last year.

We would prefer it if there was revenue growth, but the modest EPS growth gives us some relief. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Nutriband Inc. Been A Good Investment?

With a three year total loss of 15% for the shareholders, Nutriband Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

The lack lustre share price performance may have something to do with the flat earnings growth. Shareholders will get the chance to question the board on key concerns and revisit their investment thesis with regards to the company.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 5 warning signs for Nutriband you should be aware of, and 1 of them doesn't sit too well with us.

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.