Most Shareholders Will Probably Find That The Compensation For Xenetic Biosciences, Inc.'s (NASDAQ:XBIO) CEO Is Reasonable

Key Insights

• Xenetic Biosciences to hold its Annual General Meeting on 21 December 2022
• CEO Jeff Eisenberg's total compensation includes salary of US$367.5k
• Total compensation is 57% below industry average
• Xenetic Biosciences' EPS grew by 100% over the past three years while total shareholder return over the past three years was -74%

The performance at Xenetic Biosciences, Inc. (NASDAQ:XBIO) has been rather lacklustre of late and shareholders may be wondering what CEO Jeff Eisenberg is planning to do about this. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 21 December 2022. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. We think CEO compensation looks appropriate given the data we have put together.

See our latest analysis for Xenetic Biosciences

How Does Total Compensation For Jeff Eisenberg Compare With Other Companies In The Industry?

Our data indicates that Xenetic Biosciences, Inc. has a market capitalization of US$5.6m, and total annual CEO compensation was reported as US$750k for the year to December 2021. We note that's an increase of 68% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$368k.

On comparing similar-sized companies in the American Biotechs industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$1.7m. This suggests that Jeff Eisenberg is paid below the industry median.

Component	2021	2020	Proportion (2021)
Salary	US$368k	US$350k	49%
Other	US$383k	US$96k	51%
Total Compensation	US$750k	US$446k	100%

On an industry level, around 15% of total compensation represents salary and 85% is other remuneration. Xenetic Biosciences pays out 49% of remuneration in the form of a salary, significantly higher than the industry average. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Xenetic Biosciences, Inc.'s Growth

Over the past three years, Xenetic Biosciences, Inc. has seen its earnings per share (EPS) grow by 100% per year. In the last year, its revenue is up 59%.

Shareholders would be glad to know that the company has improved itself over the last few years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. 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 Xenetic Biosciences, Inc. Been A Good Investment?

Few Xenetic Biosciences, Inc. shareholders would feel satisfied with the return of -74% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

The fact that shareholders have earned a negative share price return is certainly disconcerting. This contrasts to the strong EPS growth recently however, and suggests that there may be other factors at play driving down the share price. There needs to be more focus by management and the board to examine why the share price has diverged from fundamentals. The upcoming AGM will provide shareholders the opportunity to raise their concerns and evaluate if the board’s judgement and decision-making is aligned with their expectations.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 5 warning signs for Xenetic Biosciences (2 are concerning!) that you should be aware of before investing here.

Switching gears from Xenetic Biosciences, 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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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.