Key Insights

• Zelira Therapeutics' Annual General Meeting to take place on 15th of November

• CEO Oludare Odumosu's total compensation includes salary of AU$445.4k

• The total compensation is similar to the average for the industry

• Over the past three years, Zelira Therapeutics' EPS grew by 17% and over the past three years, the total loss to shareholders 92%

Shareholders of Zelira Therapeutics Limited (ASX:ZLD) will have been dismayed by the negative share price return over the last three years. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 15th of November. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for Zelira Therapeutics

How Does Total Compensation For Oludare Odumosu Compare With Other Companies In The Industry?

At the time of writing, our data shows that Zelira Therapeutics Limited has a market capitalization of AU$11m, and reported total annual CEO compensation of AU$479k for the year to June 2023. We note that's a decrease of 25% compared to last year. Notably, the salary which is AU$445.4k, represents most of the total compensation being paid.

For comparison, other companies in the Australian Pharmaceuticals industry with market capitalizations below AU$311m, reported a median total CEO compensation of AU$673k. This suggests that Zelira Therapeutics remunerates its CEO largely in line with the industry average. Moreover, Oludare Odumosu also holds AU$128k worth of Zelira Therapeutics stock directly under their own name.

Talking in terms of the industry, salary represented approximately 61% of total compensation out of all the companies we analyzed, while other remuneration made up 39% of the pie. According to our research, Zelira Therapeutics has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Zelira Therapeutics Limited's Growth Numbers

Zelira Therapeutics Limited has seen its earnings per share (EPS) increase by 17% a year over the past three years. Its revenue is down 80% over the previous year.

This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Zelira Therapeutics Limited Been A Good Investment?

The return of -92% over three years would not have pleased Zelira Therapeutics Limited shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 5 warning signs (and 4 which are a bit concerning) in Zelira Therapeutics we think you should know about.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.