Shareholders will be pleased by the robust performance of Biomerica, Inc. (NASDAQ:BMRA) recently and this will be kept in mind in the upcoming AGM on 07 December 2022. They will probably be more interested in hearing the board discuss future initiatives to further improve the business as they vote on resolutions such as executive remuneration. Here is our take on why we think CEO compensation is fair and may even warrant a raise.
How Does Total Compensation For Zack Irani Compare With Other Companies In The Industry?
At the time of writing, our data shows that Biomerica, Inc. has a market capitalization of US$47m, and reported total annual CEO compensation of US$491k for the year to May 2022. This means that the compensation hasn't changed much from last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$135k.
In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$911k. Accordingly, Biomerica pays its CEO under the industry median. Furthermore, Zack Irani directly owns US$3.5m worth of shares in the company, implying that they are deeply invested in the company's success.
On an industry level, around 18% of total compensation represents salary and 82% is other remuneration. Biomerica pays out 27% of remuneration in the form of a salary, significantly higher than the industry average. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Biomerica, Inc.'s Growth Numbers
Over the last three years, Biomerica, Inc. has shrunk its earnings per share by 15% per year. It achieved revenue growth of 163% over the last year.
The decrease in EPS could be a concern for some investors. On the other hand, the strong revenue growth suggests the business is growing. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Biomerica, Inc. Been A Good Investment?
Biomerica, Inc. has served shareholders reasonably well, with a total return of 18% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
While the company seems to be headed in the right direction performance-wise, there's always room for improvement. If it continues on the same road, shareholders might feel even more confident about their investment, and have little to no objections concerning CEO pay. Rather, investors would more likely want to engage on discussions related to key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.
CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 3 warning signs for Biomerica you should be aware of, and 1 of them is concerning.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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.
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