We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Regulus Therapeutics Inc.'s (NASDAQ:RGLS) CEO For Now

Shareholders of Regulus Therapeutics Inc. (NASDAQ:RGLS) will have been dismayed by the negative share price return over the last three years. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 14 June 2021. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for Regulus Therapeutics

Comparing Regulus Therapeutics Inc.'s CEO Compensation With the industry

According to our data, Regulus Therapeutics Inc. has a market capitalization of US$91m, and paid its CEO total annual compensation worth US$2.3m over the year to December 2020. That's a notable increase of 16% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$552k.

For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$1.1m. This suggests that Jay Hagan is paid more than the median for the industry. What's more, Jay Hagan holds US$386k worth of shares in the company in their own name.

Component	2020	2019	Proportion (2020)
Salary	US$552k	US$536k	24%
Other	US$1.8m	US$1.5m	76%
Total Compensation	US$2.3m	US$2.0m	100%

Talking in terms of the industry, salary represented approximately 20% of total compensation out of all the companies we analyzed, while other remuneration made up 80% of the pie. It's interesting to note that Regulus Therapeutics pays out a greater portion of remuneration through salary, compared to the industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Regulus Therapeutics Inc.'s Growth

Regulus Therapeutics Inc. has seen its earnings per share (EPS) increase by 91% a year over the past three years. Its revenue is up 16,567% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Regulus Therapeutics Inc. Been A Good Investment?

Few Regulus Therapeutics Inc. shareholders would feel satisfied with the return of -85% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would be keen to know what's holding the stock back when earnings have grown. 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.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 5 warning signs for Regulus Therapeutics (2 are a bit unpleasant!) that you should be aware of before investing here.

Switching gears from Regulus Therapeutics, 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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