Here's Why Shareholders May Want To Be Cautious With Increasing Twist Bioscience Corporation's (NASDAQ:TWST) CEO Pay Packet

Key Insights

• Twist Bioscience will host its Annual General Meeting on 6th of February
• Total pay for CEO Emily Leproust includes US$685.0k salary
• The total compensation is 48% higher than the average for the industry
• Over the past three years, Twist Bioscience's EPS fell by 9.1% and over the past three years, the total loss to shareholders 83%

In the past three years, the share price of Twist Bioscience Corporation (NASDAQ:TWST) has struggled to grow and now shareholders are sitting on a loss. Per share earnings growth is also lacking, despite revenue growth. Shareholders will have a chance to take their concerns to the board at the next AGM on 6th of February and vote on resolutions including executive compensation, which studies show may have an impact on company performance. Here's our take on why we think shareholders might be hesitant about approving a raise at the moment.

See our latest analysis for Twist Bioscience

How Does Total Compensation For Emily Leproust Compare With Other Companies In The Industry?

According to our data, Twist Bioscience Corporation has a market capitalization of US$2.0b, and paid its CEO total annual compensation worth US$8.0m over the year to September 2023. We note that's an increase of 35% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$685k.

For comparison, other companies in the American Biotechs industry with market capitalizations ranging between US$1.0b and US$3.2b had a median total CEO compensation of US$5.4m. Hence, we can conclude that Emily Leproust is remunerated higher than the industry median. What's more, Emily Leproust holds US$6.4m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	US$685k	US$665k	9%
Other	US$7.3m	US$5.3m	91%
Total Compensation	US$8.0m	US$5.9m	100%

On an industry level, around 23% of total compensation represents salary and 77% is other remuneration. It's interesting to note that Twist Bioscience allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Twist Bioscience Corporation's Growth

Over the last three years, Twist Bioscience Corporation has shrunk its earnings per share by 9.1% per year. In the last year, its revenue is up 20%.

Investors would be a bit wary of companies that have lower EPS But in contrast the revenue growth is strong, suggesting future potential for EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 Twist Bioscience Corporation Been A Good Investment?

With a total shareholder return of -83% over three years, Twist Bioscience Corporation shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

The loss to shareholders over the past three years is certainly concerning and possibly has something to do with the fact that the company's earnings haven't grown. 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 3 warning signs for Twist Bioscience that investors should be aware of in a dynamic business environment.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.