Yahoo Finance It's Unlikely That Shareholders Will Increase Biome Technologies plc's (LON:BIOM) Compensation By Much This Year
The anaemic share price growth at Biome Technologies plc (LON:BIOM) over the past few years has probably not impressed shareholders and may be due to earnings not growing over that period. Some of these issues will occupy shareholders' minds as the AGM rolls around on 21 April 2021. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.
View our latest analysis for Biome Technologies
Comparing Biome Technologies plc's CEO Compensation With the industry
Our data indicates that Biome Technologies plc has a market capitalization of UK£11m, and total annual CEO compensation was reported as UK£217k for the year to December 2020. That's a notable decrease of 8.3% on last year. In particular, the salary of UK£187.2k, makes up a huge portion of the total compensation being paid to the CEO.
For comparison, other companies in the industry with market capitalizations below UK£145m, reported a median total CEO compensation of UK£216k. This suggests that Biome Technologies remunerates its CEO largely in line with the industry average. Moreover, Paul Mines also holds UK£163k worth of Biome Technologies stock directly under their own name.
Component | 2020 | 2019 | Proportion (2020) |
Salary | UK£187k | UK£205k | 86% |
Other | UK£30k | UK£31k | 14% |
Total Compensation | UK£217k | UK£237k | 100% |
Speaking on an industry level, nearly 65% of total compensation represents salary, while the remainder of 35% is other remuneration. Biome Technologies pays out 86% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at Biome Technologies plc's Growth Numbers
Over the last three years, Biome Technologies plc has shrunk its earnings per share by 86% per year. Its revenue is down 18% over the previous year.
Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Biome Technologies plc Been A Good Investment?
Biome Technologies plc has generated a total shareholder return of 2.8% over three years, so most shareholders wouldn't be too disappointed. Although, there's always room to improve. As a result, investors in the company might be reluctant about agreeing to increase CEO pay in the future, before seeing an improvement on their returns.
In Summary...
The lacklustre share price returns along with the lack of earnings growth makes us think that a strong rebound in the share price may be difficult. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 5 warning signs for Biome Technologies you should be aware of, and 1 of them is significant.
Important note: Biome Technologies 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.
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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