It's Unlikely That The CEO Of Vericel Corporation (NASDAQ:VCEL) Will See A Huge Pay Rise This Year

Key Insights

• Vericel will host its Annual General Meeting on 1st of May
• Salary of US$790.0k is part of CEO Nick Colangelo's total remuneration
• The total compensation is similar to the average for the industry
• Over the past three years, Vericel's EPS fell by 60% and over the past three years, the total loss to shareholders 26%

Shareholders of Vericel Corporation (NASDAQ:VCEL) 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. Shareholders will have a chance to take their concerns to the board at the next AGM on 1st of May and vote on resolutions including executive compensation, which studies show may have an impact on company performance. We think shareholders may be cautious of approving a pay rise for the CEO at the moment, based on our analysis below.

Check out our latest analysis for Vericel

Comparing Vericel Corporation's CEO Compensation With The Industry

According to our data, Vericel Corporation has a market capitalization of US$2.2b, and paid its CEO total annual compensation worth US$7.1m over the year to December 2023. That's a notable decrease of 19% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$790k.

On examining similar-sized companies in the American Biotechs industry with market capitalizations between US$1.0b and US$3.2b, we discovered that the median CEO total compensation of that group was US$7.0m. So it looks like Vericel compensates Nick Colangelo in line with the median for the industry. Furthermore, Nick Colangelo directly owns US$8.9m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	US$790k	US$760k	11%
Other	US$6.3m	US$7.9m	89%
Total Compensation	US$7.1m	US$8.7m	100%

On an industry level, around 24% of total compensation represents salary and 76% is other remuneration. In Vericel's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Vericel Corporation's Growth Numbers

Over the last three years, Vericel Corporation has shrunk its earnings per share by 60% per year. Its revenue is up 20% 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. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 Vericel Corporation Been A Good Investment?

Given the total shareholder loss of 26% over three years, many shareholders in Vericel Corporation are probably rather dissatisfied, to say the least. 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. 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 one thing, but it is also interesting to check if the CEO is buying or selling Vericel (free visualization of insider trades).

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.