Key Insights

• Eton Pharmaceuticals' Annual General Meeting to take place on 11th of June
• Salary of US$591.9k is part of CEO Sean Brynjelsen's total remuneration
• The overall pay is 103% above the industry average
• Eton Pharmaceuticals' EPS grew by 69% over the past three years while total shareholder loss over the past three years was 43%

The underwhelming share price performance of Eton Pharmaceuticals, Inc. (NASDAQ:ETON) in the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. The AGM coming up on the 11th of June could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

How Does Total Compensation For Sean Brynjelsen Compare With Other Companies In The Industry?

Our data indicates that Eton Pharmaceuticals, Inc. has a market capitalization of US$93m, and total annual CEO compensation was reported as US$1.7m for the year to December 2023. Notably, that's a decrease of 18% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$592k.

In comparison with other companies in the American Pharmaceuticals industry with market capitalizations under US$200m, the reported median total CEO compensation was US$860k. Accordingly, our analysis reveals that Eton Pharmaceuticals, Inc. pays Sean Brynjelsen north of the industry median. What's more, Sean Brynjelsen holds US$3.9m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Talking in terms of the industry, salary represented approximately 29% of total compensation out of all the companies we analyzed, while other remuneration made up 71% of the pie. Eton Pharmaceuticals is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Eton Pharmaceuticals, Inc.'s Growth

Eton Pharmaceuticals, Inc. has seen its earnings per share (EPS) increase by 69% a year over the past three years. Its revenue is up 41% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Eton Pharmaceuticals, Inc. Been A Good Investment?

Few Eton Pharmaceuticals, Inc. shareholders would feel satisfied with the return of -43% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Eton Pharmaceuticals that you should be aware of before investing.

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.