We Think Shareholders May Want To Consider A Review Of Sangamo Therapeutics, Inc.'s (NASDAQ:SGMO) CEO Compensation Package

Key Insights

• Sangamo Therapeutics' Annual General Meeting to take place on 4th of June
• CEO Sandy Macrae's total compensation includes salary of US$716.4k
• The total compensation is 119% higher than the average for the industry
• Sangamo Therapeutics' three-year loss to shareholders was 94% while its EPS was down 15% over the past three years

The results at Sangamo Therapeutics, Inc. (NASDAQ:SGMO) have been quite disappointing recently and CEO Sandy Macrae bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 4th of June. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

View our latest analysis for Sangamo Therapeutics

How Does Total Compensation For Sandy Macrae Compare With Other Companies In The Industry?

According to our data, Sangamo Therapeutics, Inc. has a market capitalization of US$124m, and paid its CEO total annual compensation worth US$2.4m over the year to December 2023. We note that's a decrease of 50% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$716k.

For comparison, other companies in the American Biotechs industry with market capitalizations below US$200m, reported a median total CEO compensation of US$1.1m. Accordingly, our analysis reveals that Sangamo Therapeutics, Inc. pays Sandy Macrae north of the industry median. Moreover, Sandy Macrae also holds US$218k worth of Sangamo Therapeutics stock directly under their own name.

Component	2023	2022	Proportion (2023)
Salary	US$716k	US$709k	30%
Other	US$1.7m	US$4.1m	70%
Total Compensation	US$2.4m	US$4.8m	100%

Talking in terms of the industry, salary represented approximately 23% of total compensation out of all the companies we analyzed, while other remuneration made up 77% of the pie. Sangamo Therapeutics is paying a higher share of its remuneration through a salary in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Sangamo Therapeutics, Inc.'s Growth

Over the last three years, Sangamo Therapeutics, Inc. has shrunk its earnings per share by 15% per year. Its revenue is down 92% over the previous year.

Overall this is not a very positive result for shareholders. 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. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Sangamo Therapeutics, Inc. Been A Good Investment?

The return of -94% over three years would not have pleased Sangamo Therapeutics, Inc. shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

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, the board will get the chance to explain the steps it plans to take to improve business performance.

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 4 warning signs for Sangamo Therapeutics you should be aware of, and 1 of them is a bit unpleasant.

Important note: Sangamo Therapeutics is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.