Yahoo Finance This Is Why Humacyte, Inc.'s (NASDAQ:HUMA) CEO Compensation Looks Appropriate
Key Insights
Humacyte to hold its Annual General Meeting on 11th of June
Salary of US$603.8k is part of CEO Laura Niklason's total remuneration
The total compensation is 37% less than the average for the industry
Humacyte's EPS grew by 136% over the past three years while total shareholder loss over the past three years was 40%
The performance at Humacyte, Inc. (NASDAQ:HUMA) has been rather lacklustre of late and shareholders may be wondering what CEO Laura Niklason is planning to do about this. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 11th of June. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. We think CEO compensation looks appropriate given the data we have put together.
View our latest analysis for Humacyte
Comparing Humacyte, Inc.'s CEO Compensation With The Industry
Our data indicates that Humacyte, Inc. has a market capitalization of US$878m, and total annual CEO compensation was reported as US$2.6m for the year to December 2023. We note that's an increase of 50% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$604k.
On comparing similar companies from the American Biotechs industry with market caps ranging from US$400m to US$1.6b, we found that the median CEO total compensation was US$4.2m. This suggests that Laura Niklason is paid below the industry median. What's more, Laura Niklason holds US$9.2m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$604k | US$500k | 23% |
Other | US$2.0m | US$1.2m | 77% |
Total Compensation | US$2.6m | US$1.7m | 100% |
On an industry level, around 23% of total compensation represents salary and 77% is other remuneration. There isn't a significant difference between Humacyte and the broader market, in terms of salary allocation in the overall compensation package. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Humacyte, Inc.'s Growth Numbers
Humacyte, Inc. has seen its earnings per share (EPS) increase by 136% a year over the past three years. It has seen most of its revenue evaporate over the past year.
Shareholders would be glad to know that the company has improved itself over the last few years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Humacyte, Inc. Been A Good Investment?
With a total shareholder return of -40% over three years, Humacyte, Inc. shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
The loss to shareholders over the past three years is certainly concerning. The share price trend has diverged with the robust growth in EPS however, suggesting there may be other factors that could be driving the price performance. A key focus for the board and management will be how to align the share price with fundamentals. 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.
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 4 warning signs (and 1 which is potentially serious) in Humacyte 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.
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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.
