Geoffrey Kempler has been the CEO of Prana Biotechnology Limited (ASX:PBT) since 2005. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
See our latest analysis for Prana Biotechnology
How Does Geoffrey Kempler’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Prana Biotechnology Limited has a market cap of AU$20m, and is paying total annual CEO compensation of AU$644k. (This number is for the twelve months until 2018). We note that’s an increase of 42% above last year. While we always look at total compensation first, we note that the salary component is less, at AU$381k. We examined a group of similar sized companies, with market capitalizations of below AU$278m. The median CEO compensation in that group is AU$365k.
It would therefore appear that Prana Biotechnology Limited pays Geoffrey Kempler more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see a visual representation of the CEO compensation at Prana Biotechnology, below.
Is Prana Biotechnology Limited Growing?
On average over the last three years, Prana Biotechnology Limited has shrunk earnings per share by 4.4% each year. It achieved revenue growth of 5.4% over the last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. And the modest revenue growth over 12 months isn’t much comfort against the reduced earnings per share. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO.
We don’t have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Prana Biotechnology Limited Been A Good Investment?
Given the total loss of 63% over three years, many shareholders in Prana Biotechnology Limited are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.