Shareholders will probably not be too impressed with the underwhelming results at Omeros Corporation (NASDAQ:OMER) recently. At the upcoming AGM on 11 June 2021, 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. The data we present below explains why we think CEO compensation is not consistent with recent performance.
Comparing Omeros Corporation's CEO Compensation With the industry
According to our data, Omeros Corporation has a market capitalization of US$989m, and paid its CEO total annual compensation worth US$5.8m over the year to December 2020. Notably, that's an increase of 20% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$817k.
In comparison with other companies in the industry with market capitalizations ranging from US$400m to US$1.6b, the reported median CEO total compensation was US$2.7m. Hence, we can conclude that Greg Demopulos is remunerated higher than the industry median. Moreover, Greg Demopulos also holds US$32m worth of Omeros stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Speaking on an industry level, nearly 28% of total compensation represents salary, while the remainder of 72% is other remuneration. It's interesting to note that Omeros 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.
A Look at Omeros Corporation's Growth Numbers
Over the last three years, Omeros Corporation has shrunk its earnings per share by 5.1% per year. It saw its revenue drop 37% over the last 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. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Omeros Corporation Been A Good Investment?
Since shareholders would have lost about 13% over three years, some Omeros Corporation investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.
Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. 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.
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 Omeros you should be aware of, and 2 of them make us uncomfortable.
Switching gears from Omeros, 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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