In the past three years, the share price of Coherus BioSciences, Inc. (NASDAQ:CHRS) has struggled to generate growth for its shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. The AGM coming up on the 21 May 2021 could be an opportunity for shareholders to bring these concerns to the board's attention. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for Coherus BioSciences

Comparing Coherus BioSciences, Inc.'s CEO Compensation With the industry

Our data indicates that Coherus BioSciences, Inc. has a market capitalization of US$1.1b, and total annual CEO compensation was reported as US$7.3m for the year to December 2020. That's a notable increase of 36% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$857k.

For comparison, other companies in the same industry with market capitalizations ranging between US$400m and US$1.6b had a median total CEO compensation of US$3.4m. This suggests that Denny Lanfear is paid more than the median for the industry. Moreover, Denny Lanfear also holds US$9.7m worth of Coherus BioSciences stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, roughly 20% of total compensation represents salary and 80% is other remuneration. In Coherus BioSciences' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Coherus BioSciences, Inc.'s Growth

Coherus BioSciences, Inc.'s earnings per share (EPS) grew 92% per year over the last three years. Its revenue is up 1.7% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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 Coherus BioSciences, Inc. Been A Good Investment?

Since shareholders would have lost about 2.4% over three years, some Coherus BioSciences, Inc. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

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.

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 3 warning signs for Coherus BioSciences that investors should look into moving forward.

Important note: Coherus BioSciences 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.

This article by Simply Wall St is general in nature. 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.

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