Key Insights

• Verrica Pharmaceuticals' Annual General Meeting to take place on 6th of June
• Total pay for CEO Ted White includes US$600.6k salary
• The overall pay is comparable to the industry average
• Over the past three years, Verrica Pharmaceuticals' EPS grew by 6.3% and over the past three years, the total loss to shareholders 15%

In the past three years, shareholders of Verrica Pharmaceuticals Inc. (NASDAQ:VRCA) have seen a loss on their investment. 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 6th of June. They could also influence management through voting on resolutions such as executive remuneration. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

How Does Total Compensation For Ted White Compare With Other Companies In The Industry?

At the time of writing, our data shows that Verrica Pharmaceuticals Inc. has a market capitalization of US$353m, and reported total annual CEO compensation of US$3.5m for the year to December 2023. That's a notable increase of 81% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$601k.

In comparison with other companies in the American Pharmaceuticals industry with market capitalizations ranging from US$200m to US$800m, the reported median CEO total compensation was US$3.5m. So it looks like Verrica Pharmaceuticals compensates Ted White in line with the median for the industry. What's more, Ted White holds US$1.4m worth of shares in the company in their own name.

On an industry level, roughly 29% of total compensation represents salary and 71% is other remuneration. It's interesting to note that Verrica Pharmaceuticals allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Verrica Pharmaceuticals Inc.'s Growth

Verrica Pharmaceuticals Inc.'s earnings per share (EPS) grew 6.3% per year over the last three years. In the last year, its revenue is up 3.2%.

We're not particularly impressed by the revenue growth, but the modest improvement in EPS is good. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. 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 Verrica Pharmaceuticals Inc. Been A Good Investment?

With a three year total loss of 15% for the shareholders, Verrica Pharmaceuticals Inc. would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. 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. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 1 warning sign for Verrica Pharmaceuticals that investors should look into moving forward.

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.