We Think Some Shareholders May Hesitate To Increase Theravance Biopharma, Inc.'s (NASDAQ:TBPH) CEO Compensation
Key Insights
- Theravance Biopharma to hold its Annual General Meeting on 19th of May
- Total pay for CEO Rick Winningham includes US$1.05m salary
- Total compensation is similar to the industry average
- Over the past three years, Theravance Biopharma's EPS grew by 37% and over the past three years, the total loss to shareholders 1.5%
As many shareholders of Theravance Biopharma, Inc. (NASDAQ:TBPH) will be aware, they have not made a gain on their investment in the past three years. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 19th of May. 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.
View our latest analysis for Theravance Biopharma
How Does Total Compensation For Rick Winningham Compare With Other Companies In The Industry?
At the time of writing, our data shows that Theravance Biopharma, Inc. has a market capitalization of US$449m, and reported total annual CEO compensation of US$4.0m for the year to December 2024. That's a slight decrease of 7.5% on the prior year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.0m.
On comparing similar companies from the American Pharmaceuticals industry with market caps ranging from US$200m to US$800m, we found that the median CEO total compensation was US$4.2m. This suggests that Theravance Biopharma remunerates its CEO largely in line with the industry average. Furthermore, Rick Winningham directly owns US$12m worth of shares in the company, implying that they are deeply invested in the company's success.
| Component | 2024 | 2023 | Proportion (2024) |
| Salary | US$1.0m | US$1.0m | 26% |
| Other | US$2.9m | US$3.3m | 74% |
| Total Compensation | US$4.0m | US$4.3m | 100% |
On an industry level, roughly 27% of total compensation represents salary and 73% is other remuneration. Although there is a difference in how total compensation is set, Theravance Biopharma more or less reflects the market in terms of setting the salary. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Theravance Biopharma, Inc.'s Growth
Theravance Biopharma, Inc.'s earnings per share (EPS) grew 37% per year over the last three years. Its revenue is up 6.1% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. 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 Theravance Biopharma, Inc. Been A Good Investment?
Given the total shareholder loss of 1.5% over three years, many shareholders in Theravance Biopharma, Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would be keen to know what's holding the stock back when earnings have grown. At 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 will likely improve performance in the future.
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 1 warning sign for Theravance Biopharma that investors should think about before committing capital to this stock.
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.
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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.