Shareholders of Sangamo Therapeutics, Inc. (NASDAQ:SGMO) will have been dismayed by the negative share price return over the last three years. Per share earnings growth is also poor, despite revenues growing. The AGM coming up on 25 May 2021 will be an opportunity for shareholders to have their concerns addressed by the board and for them to exercise their influence on management through voting on resolutions such as executive remuneration. Here's why we think shareholders should hold off on a raise for the CEO at the moment.
Comparing Sangamo Therapeutics, Inc.'s CEO Compensation With the industry
At the time of writing, our data shows that Sangamo Therapeutics, Inc. has a market capitalization of US$1.6b, and reported total annual CEO compensation of US$3.8m for the year to December 2020. We note that's a small decrease of 3.8% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$682k.
In comparison with other companies in the industry with market capitalizations ranging from US$1.0b to US$3.2b, the reported median CEO total compensation was US$4.9m. This suggests that Sangamo Therapeutics remunerates its CEO largely in line with the industry average. Furthermore, Sandy Macrae directly owns US$813k worth of shares in the company.
Speaking on an industry level, nearly 19% of total compensation represents salary, while the remainder of 81% is other remuneration. There isn't a significant difference between Sangamo Therapeutics and the broader market, in terms of salary allocation in the overall compensation package. 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 Sangamo Therapeutics, Inc.'s Growth Numbers
Over the last three years, Sangamo Therapeutics, Inc. has shrunk its earnings per share by 4.7% per year. Its revenue is up 22% over the last year.
The reduction in EPS, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 Sangamo Therapeutics, Inc. Been A Good Investment?
With a total shareholder return of -31% over three years, Sangamo Therapeutics, Inc. shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
The company's earnings haven't grown and possibly because of that, the stock has performed poorly, resulting in a loss for the company's shareholders. In the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan is in line with their expectations.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 4 warning signs for Sangamo Therapeutics that investors should think about before committing capital to this stock.
Switching gears from Sangamo 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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