Key Insights

• RedHill Biopharma will host its Annual General Meeting on 17th of September
• Total pay for CEO Dror Ben-Asher includes US$473.1k salary
• The overall pay is 33% below the industry average
• Over the past three years, RedHill Biopharma's EPS grew by 87% and over the past three years, the total loss to shareholders 100%

The performance at RedHill Biopharma Ltd. (NASDAQ:RDHL) has been rather lacklustre of late and shareholders may be wondering what CEO Dror Ben-Asher is planning to do about this. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 17th of September. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

How Does Total Compensation For Dror Ben-Asher Compare With Other Companies In The Industry?

According to our data, RedHill Biopharma Ltd. has a market capitalization of US$13m, and paid its CEO total annual compensation worth US$595k over the year to December 2023. We note that's a decrease of 31% compared to last year. Notably, the salary which is US$473.1k, represents most of the total compensation being paid.

In comparison with other companies in the American Pharmaceuticals industry with market capitalizations under US$200m, the reported median total CEO compensation was US$881k. That is to say, Dror Ben-Asher is paid under the industry median.

Talking in terms of the industry, salary represented approximately 26% of total compensation out of all the companies we analyzed, while other remuneration made up 74% of the pie. It's interesting to note that RedHill Biopharma pays out a greater portion of remuneration through salary, compared to the industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

RedHill Biopharma Ltd.'s Growth

RedHill Biopharma Ltd.'s earnings per share (EPS) grew 87% per year over the last three years. Its revenue is down 90% over the previous year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has RedHill Biopharma Ltd. Been A Good Investment?

With a total shareholder return of -100% over three years, RedHill Biopharma Ltd. shareholders would by and large be disappointed. 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. A key question may be why the fundamentals have not yet been reflected into the share price. In the upcoming AGM, shareholders should take this opportunity to raise these concerns with the board and revisit their investment thesis with regards to the company.

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 RedHill Biopharma you should be aware of, and 3 of them are concerning.

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.