We Think Pieris Pharmaceuticals, Inc.'s (NASDAQ:PIRS) CEO Compensation Package Needs To Be Put Under A Microscope

Shareholders will probably not be too impressed with the underwhelming results at Pieris Pharmaceuticals, Inc. (NASDAQ:PIRS) recently. At the upcoming AGM on 25 June 2021, shareholders can hear from the board including their plans for turning around performance. 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.

View our latest analysis for Pieris Pharmaceuticals

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

Our data indicates that Pieris Pharmaceuticals, Inc. has a market capitalization of US$223m, and total annual CEO compensation was reported as US$1.5m for the year to December 2020. That's slightly lower by 3.4% over the previous year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$535k.

For comparison, other companies in the same industry with market capitalizations ranging between US$100m and US$400m had a median total CEO compensation of US$1.7m. This suggests that Pieris Pharmaceuticals remunerates its CEO largely in line with the industry average.

Component	2020	2019	Proportion (2020)
Salary	US$535k	US$515k	35%
Other	US$1.0m	US$1.1m	65%
Total Compensation	US$1.5m	US$1.6m	100%

On an industry level, roughly 20% of total compensation represents salary and 80% is other remuneration. Pieris Pharmaceuticals pays out 35% of remuneration in the form of a salary, significantly higher than the industry average. 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 Pieris Pharmaceuticals, Inc.'s Growth Numbers

Pieris Pharmaceuticals, Inc. has reduced its earnings per share by 20% a year over the last three years. It saw its revenue drop 38% 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. So given this relatively weak performance, shareholders would probably not want to see high compensation 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 Pieris Pharmaceuticals, Inc. Been A Good Investment?

Few Pieris Pharmaceuticals, Inc. shareholders would feel satisfied with the return of -32% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a 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.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 3 warning signs for Pieris Pharmaceuticals that you should be aware of before investing.

Switching gears from Pieris Pharmaceuticals, 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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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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