This article will reflect on the compensation paid to Geert Kersten who has served as CEO of CEL-SCI Corporation (NYSEMKT:CVM) since 1995. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for CEL-SCI.
View our latest analysis for CEL-SCI
How Does Total Compensation For Geert Kersten Compare With Other Companies In The Industry?
Our data indicates that CEL-SCI Corporation has a market capitalization of US$567m, and total annual CEO compensation was reported as US$3.3m for the year to September 2020. Notably, that's a decrease of 26% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$756k.
On comparing similar companies from the same industry with market caps ranging from US$200m to US$800m, we found that the median CEO total compensation was US$1.8m. This suggests that Geert Kersten is paid more than the median for the industry. What's more, Geert Kersten holds US$16m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | US$756k | US$511k | 23% |
| Other | US$2.6m | US$4.0m | 77% |
| Total Compensation | US$3.3m | US$4.5m | 100% |
Talking in terms of the industry, salary represented approximately 25% of total compensation out of all the companies we analyzed, while other remuneration made up 75% of the pie. CEL-SCI sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
CEL-SCI Corporation's Growth
CEL-SCI Corporation's earnings per share (EPS) grew 38% per year over the last three years. In the last year, its revenue is up 21%.
Shareholders would be glad to know that the company has improved itself over the last few years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has CEL-SCI Corporation Been A Good Investment?
Most shareholders would probably be pleased with CEL-SCI Corporation for providing a total return of 528% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
To Conclude...
As previously discussed, Geert is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Importantly though, EPS growth and shareholder returns are very impressive over the last three years. So, in acknowledgment of the overall excellent performance, we believe CEO compensation is appropriate. The pleasing shareholder returns are the cherry on top. We wouldn't be wrong in saying that shareholders feel that Geert's performance creates value for the company.
CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 4 warning signs for CEL-SCI you should be aware of, and 2 of them shouldn't be ignored.
Important note: CEL-SCI is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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This article by Simply Wall St is general in nature. 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.
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About NYSEAM:CVM
CEL-SCI
A clinical-stage biotechnology company, engages in the research and development of immune system therapy for the treatment of cancer and other diseases in the United States.
Adequate balance sheet slight.
