Key Insights

• iTeos Therapeutics to hold its Annual General Meeting on 11th of June
• Total pay for CEO Michel Detheux includes US$578.9k salary
• The total compensation is 38% higher than the average for the industry
• iTeos Therapeutics' EPS declined by 40% over the past three years while total shareholder loss over the past three years was 17%

The results at iTeos Therapeutics, Inc. (NASDAQ:ITOS) have been quite disappointing recently and CEO Michel Detheux bears some responsibility for this. At the upcoming AGM on 11th of June, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. We present the case why we think CEO compensation is out of sync with company performance.

How Does Total Compensation For Michel Detheux Compare With Other Companies In The Industry?

At the time of writing, our data shows that iTeos Therapeutics, Inc. has a market capitalization of US$633m, and reported total annual CEO compensation of US$5.8m for the year to December 2023. That's a notable decrease of 45% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$579k.

In comparison with other companies in the American Biotechs industry with market capitalizations ranging from US$400m to US$1.6b, the reported median CEO total compensation was US$4.2m. This suggests that Michel Detheux is paid more than the median for the industry. What's more, Michel Detheux holds US$357k worth of shares in the company in their own name.

Talking in terms of the industry, salary represented approximately 23% of total compensation out of all the companies we analyzed, while other remuneration made up 77% of the pie. In iTeos Therapeutics' 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.

A Look at iTeos Therapeutics, Inc.'s Growth Numbers

iTeos Therapeutics, Inc. has reduced its earnings per share by 40% a year over the last three years. In the last year, its revenue has collapsed effectively to zero.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 iTeos Therapeutics, Inc. Been A Good Investment?

Given the total shareholder loss of 17% over three years, many shareholders in iTeos Therapeutics, Inc. are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 3 warning signs (and 1 which is potentially serious) in iTeos Therapeutics we think you should know about.

Important note: iTeos 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.