Increases to CEO Compensation Might Be Put On Hold For Now at Opiant Pharmaceuticals, Inc. (NASDAQ:OPNT)

The underwhelming share price performance of Opiant Pharmaceuticals, Inc. (NASDAQ:OPNT) in the past three years would have disappointed many shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 15 June 2021. They could also influence management through voting on resolutions such as executive remuneration. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Opiant Pharmaceuticals

Comparing Opiant Pharmaceuticals, Inc.'s CEO Compensation With the industry

Our data indicates that Opiant Pharmaceuticals, Inc. has a market capitalization of US$55m, and total annual CEO compensation was reported as US$1.7m for the year to December 2020. That's a notable increase of 54% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$610k.

In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$720k. Hence, we can conclude that Roger Crystal is remunerated higher than the industry median. Furthermore, Roger Crystal directly owns US$152k worth of shares in the company.

Component	2020	2019	Proportion (2020)
Salary	US$610k	US$592k	37%
Other	US$1.1m	US$486k	63%
Total Compensation	US$1.7m	US$1.1m	100%

On an industry level, roughly 28% of total compensation represents salary and 72% is other remuneration. Opiant Pharmaceuticals is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Opiant Pharmaceuticals, Inc.'s Growth

Over the past three years, Opiant Pharmaceuticals, Inc. has seen its earnings per share (EPS) grow by 65% per year. It saw its revenue drop 19% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 Opiant Pharmaceuticals, Inc. Been A Good Investment?

Since shareholders would have lost about 18% over three years, some Opiant Pharmaceuticals, Inc. investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.

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. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 2 warning signs for Opiant Pharmaceuticals that investors should be aware of in a dynamic business environment.

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. 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.
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