Key Insights

• Bicycle Therapeutics' Annual General Meeting to take place on 16th of May
• Total pay for CEO Kevin Lee includes US$710.3k salary
• The overall pay is 32% above the industry average
• Over the past three years, Bicycle Therapeutics' EPS fell by 23% and over the past three years, the total loss to shareholders 21%

In the past three years, the share price of Bicycle Therapeutics plc (NASDAQ:BCYC) has struggled to grow and now shareholders are sitting on a loss. Per share earnings growth is also lacking, despite revenue growth. The AGM coming up on 16th of May will be an opportunity for shareholders to have their concerns addressed by the board and for them to exercise their influence on management through voting on resolutions such as executive remuneration. Here's why we think shareholders should hold off on a raise for the CEO at the moment.

Check out our latest analysis for Bicycle Therapeutics

How Does Total Compensation For Kevin Lee Compare With Other Companies In The Industry?

At the time of writing, our data shows that Bicycle Therapeutics plc has a market capitalization of US$1.0b, and reported total annual CEO compensation of US$5.5m for the year to December 2023. We note that's a decrease of 36% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$710k.

For comparison, other companies in the American Biotechs industry with market capitalizations ranging between US$400m and US$1.6b had a median total CEO compensation of US$4.2m. Accordingly, our analysis reveals that Bicycle Therapeutics plc pays Kevin Lee north of the industry median. Furthermore, Kevin Lee directly owns US$5.3m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 23% of total compensation represents salary, while the remainder of 77% is other remuneration. It's interesting to note that Bicycle Therapeutics allocates a smaller portion of compensation to salary 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.

Bicycle Therapeutics plc's Growth

Over the last three years, Bicycle Therapeutics plc has shrunk its earnings per share by 23% per year. It achieved revenue growth of 168% over the last year.

Investors would be a bit wary of companies that have lower EPS But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 Bicycle Therapeutics plc Been A Good Investment?

With a three year total loss of 21% for the shareholders, Bicycle Therapeutics plc would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

The company's earnings haven't grown and possibly because of that, the stock has performed poorly, resulting in a loss for the company's shareholders. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 2 warning signs for Bicycle Therapeutics that investors should look into moving forward.

Important note: Bicycle 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.

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.