Key Insights

• CytomX Therapeutics will host its Annual General Meeting on 15th of May
• Total pay for CEO Sean McCarthy includes US$652.1k salary
• The total compensation is similar to the average for the industry
• Over the past three years, CytomX Therapeutics' EPS grew by 46% and over the past three years, the total loss to shareholders 75%

Shareholders of CytomX Therapeutics, Inc. (NASDAQ:CTMX) will have been dismayed by the negative share price return over the last three years. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 15th of May. They could also influence management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

Comparing CytomX Therapeutics, Inc.'s CEO Compensation With The Industry

At the time of writing, our data shows that CytomX Therapeutics, Inc. has a market capitalization of US$284m, and reported total annual CEO compensation of US$2.6m for the year to December 2023. Notably, that's a decrease of 13% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$652k.

On comparing similar companies from the American Biotechs industry with market caps ranging from US$100m to US$400m, we found that the median CEO total compensation was US$2.7m. So it looks like CytomX Therapeutics compensates Sean McCarthy in line with the median for the industry. Moreover, Sean McCarthy also holds US$1.1m worth of CytomX Therapeutics stock directly under their own name.

On an industry level, around 23% of total compensation represents salary and 77% is other remuneration. Our data reveals that CytomX Therapeutics allocates salary more or less in line with the wider market. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

CytomX Therapeutics, Inc.'s Growth

Over the past three years, CytomX Therapeutics, Inc. has seen its earnings per share (EPS) grow by 46% per year. Its revenue is up 76% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. 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 CytomX Therapeutics, Inc. Been A Good Investment?

The return of -75% over three years would not have pleased CytomX Therapeutics, Inc. 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. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. 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.

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 CytomX Therapeutics you should be aware of, and 3 of them can't be ignored.

Important note: CytomX Therapeutics 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.

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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.