Street Calls of the Week
Neogen Corporation (NASDAQ:NEOG), currently valued at $1.21 billion, announced on Thursday that it has granted performance share units (PSUs) and stock options to key executive officers as part of its fiscal year 2026 long-term incentive compensation program. According to InvestingPro analysis, the company is currently trading near its Fair Value despite facing profitability challenges, with a negative EPS of $5.03 over the last twelve months. The information is based on a press release statement included in a filing with the Securities and Exchange Commission.
On August 15, the company granted PSUs to Chief Executive Officer Mikhael Nassif (414,365 units), Chief Financial Officer and Chief Operating Officer David Naemura (230,203 units), and Chief Legal and Compliance Officer Amy Rocklin (119,705 units). Each PSU entitles the holder to one share of Neogen common stock, subject to the company’s performance over a three-year period covering fiscal years 2026 through 2028. Performance will be measured against targets for revenue compounded annual growth rate (40% weighting), adjusted EBITDA margin expansion (30%), and cash flow conversion (30%). The specific targets for these metrics were not disclosed.
Depending on the level of performance achieved, payouts can range from 50% to 200% of the target number of PSUs. The awards also include a modifier based on Neogen’s relative total shareholder return compared to the S&P 600 Healthcare Equipment & Services peer group. Performance at or above the 75th percentile of the peer group will increase the payout by 20%, while performance below the 25th percentile will decrease it by 20%.
In addition to the PSUs, the company granted stock options representing the other half of the executives’ long-term incentive awards. Mr. Nassif received options to purchase up to 1,065,042 shares, while Mr. Naemura and Ms. Rocklin received options for 591,690 and 307,680 shares, respectively. The options vest over three years, have a ten-year term, and carry a strike price of $5.43 per share, equal to the closing price on the grant date.
The options granted to Mr. Nassif were awarded as an inducement grant in connection with his appointment as CEO on August 11. The options for Mr. Naemura and Ms. Rocklin were granted under the company’s 2023 Omnibus Incentive Plan.
Further details will be included in Neogen’s upcoming quarterly report.
In other recent news, Neogen Corporation reported its fourth-quarter 2025 earnings, surpassing analysts’ expectations with an earnings per share (EPS) of $0.05, compared to the projected -$0.03. The company’s revenue also exceeded forecasts, reaching $225.5 million against the expected $221.92 million. Despite these positive financial results, William Blair downgraded Neogen’s stock from Outperform to Market Perform, citing a weak outlook due to challenging macroeconomic conditions and flat to declining revenue guidance for fiscal 2026, excluding the divested disinfectant business.
Additionally, Neogen announced a partnership with Biomatter to develop enzyme-based food safety products. This collaboration will leverage Neogen’s analytical development expertise and Biomatter’s Intelligent Architecture platform to design specialized enzymes. In corporate governance news, William Boehm will retire from Neogen’s Board of Directors in October 2025, with Avi (JO:AVIJ) Pelossof set to join the board shortly after. Pelossof brings significant experience from his previous role at Immucor Inc.
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