In the past three years, the share price of SIGA Technologies, Inc. (NASDAQ:SIGA) has struggled to generate growth for its shareholders. Per share earnings growth is also lacking, despite revenue growth. The AGM coming up on 15 June 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 our take on why we think shareholders might be hesitant about approving a raise at the moment.
How Does Total Compensation For Phil Gomez Compare With Other Companies In The Industry?
At the time of writing, our data shows that SIGA Technologies, Inc. has a market capitalization of US$510m, and reported total annual CEO compensation of US$1.6m for the year to December 2020. That is, the compensation was roughly the same as last year. In particular, the salary of US$819.5k, makes up a huge portion of the total compensation being paid to the CEO.
On comparing similar companies from the same industry with market caps ranging from US$200m to US$800m, we found that the median CEO total compensation was US$2.1m. So it looks like SIGA Technologies compensates Phil Gomez in line with the median for the industry. What's more, Phil Gomez holds US$3.2m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Speaking on an industry level, nearly 28% of total compensation represents salary, while the remainder of 72% is other remuneration. SIGA Technologies pays out 50% of remuneration in the form of a salary, significantly higher than the industry average.
SIGA Technologies, Inc.'s Growth
Over the last three years, SIGA Technologies, Inc. has shrunk its earnings per share by 41% per year. It achieved revenue growth of 573% over the last year.
The reduction in EPS, over three years, is arguably concerning. On the other hand, the strong revenue growth suggests the business is growing. 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. 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 SIGA Technologies, Inc. Been A Good Investment?
With a three year total loss of 4.4% for the shareholders, SIGA Technologies, Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too 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. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 1 warning sign for SIGA Technologies that investors should be aware of in a dynamic business environment.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
If you decide to trade SIGA Technologies, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted
Valuation is complex, but we're helping make it simple.
Find out whether SIGA Technologies is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free Analysis
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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.