In the past three years, shareholders of Jounce Therapeutics, Inc. (NASDAQ:JNCE) have seen a loss on their investment. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. The AGM coming up on the 18 June 2021 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. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.
Check out our latest analysis for Jounce Therapeutics
Comparing Jounce Therapeutics, Inc.'s CEO Compensation With the industry
According to our data, Jounce Therapeutics, Inc. has a market capitalization of US$362m, and paid its CEO total annual compensation worth US$2.0m over the year to December 2020. Notably, that's an increase of 36% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$565k.
On examining similar-sized companies in the industry with market capitalizations between US$200m and US$800m, we discovered that the median CEO total compensation of that group was US$2.3m. This suggests that Jounce Therapeutics remunerates its CEO largely in line with the industry average. What's more, Rich Murray holds US$647k worth of shares in the company in their own name.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | US$565k | US$541k | 28% |
| Other | US$1.4m | US$928k | 72% |
| Total Compensation | US$2.0m | US$1.5m | 100% |
On an industry level, roughly 20% of total compensation represents salary and 80% is other remuneration. Jounce Therapeutics is paying a higher share of its remuneration through a salary in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Jounce Therapeutics, Inc.'s Growth
Over the past three years, Jounce Therapeutics, Inc. has seen its earnings per share (EPS) grow by 1.4% per year. Its revenue is down 53% over the previous year.
We would argue that the lack of revenue growth in the last year is less than ideal, but it is good to see a modest EPS growth at least. 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. 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.