Shareholders will probably not be disappointed by the robust results at VBI Vaccines Inc. (NASDAQ:VBIV) recently and they will be keeping this in mind as they go into the AGM on 09 June 2021. They will probably be more interested in hearing the board discuss future initiatives to further improve the business as they vote on resolutions such as executive remuneration. In our analysis below, we discuss why we think the CEO compensation looks acceptable and the case for a raise.
Comparing VBI Vaccines Inc.'s CEO Compensation With the industry
According to our data, VBI Vaccines Inc. has a market capitalization of US$897m, and paid its CEO total annual compensation worth US$2.2m over the year to December 2020. That's a notable increase of 63% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$535k.
On examining similar-sized companies in the industry with market capitalizations between US$400m and US$1.6b, we discovered that the median CEO total compensation of that group was US$3.3m. That is to say, Jeff Baxter is paid under the industry median. Furthermore, Jeff Baxter directly owns US$2.1m worth of shares in the company, implying that they are deeply invested in the company's success.
Talking in terms of the industry, salary represented approximately 20% of total compensation out of all the companies we analyzed, while other remuneration made up 80% of the pie. It's interesting to note that VBI Vaccines pays out a greater portion of remuneration through salary, compared to the industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at VBI Vaccines Inc.'s Growth Numbers
VBI Vaccines Inc.'s earnings per share (EPS) grew 50% per year over the last three years. In the last year, its revenue is down 58%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 VBI Vaccines Inc. Been A Good Investment?
VBI Vaccines Inc. has served shareholders reasonably well, with a total return of 16% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
While the company seems to be headed in the right direction performance-wise, there's always room for improvement. If it continues on the same road, shareholders might feel even more confident about their investment, and have little to no objections concerning CEO pay. Rather, investors would more likely want to engage on discussions related to key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 3 warning signs for VBI Vaccines (of which 1 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.
Switching gears from VBI Vaccines, 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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