Richard Lipscombe became the CEO of Proteomics International Laboratories Limited (ASX:PIQ) in 2014, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Proteomics International Laboratories pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
View our latest analysis for Proteomics International Laboratories
How Does Total Compensation For Richard Lipscombe Compare With Other Companies In The Industry?
At the time of writing, our data shows that Proteomics International Laboratories Limited has a market capitalization of AU$44m, and reported total annual CEO compensation of AU$299k for the year to June 2020. That's a notable increase of 44% on last year. In particular, the salary of AU$250.0k, makes up a huge portion of the total compensation being paid to the CEO.
In comparison with other companies in the industry with market capitalizations under AU$274m, the reported median total CEO compensation was AU$409k. This suggests that Proteomics International Laboratories remunerates its CEO largely in line with the industry average. Moreover, Richard Lipscombe also holds AU$9.1m worth of Proteomics International Laboratories stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, around 80% of total compensation represents salary and 20% is other remuneration. Although there is a difference in how total compensation is set, Proteomics International Laboratories more or less reflects the market in terms of setting the salary. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
A Look at Proteomics International Laboratories Limited's Growth Numbers
Proteomics International Laboratories Limited saw earnings per share stay pretty flat over the last three years. In the last year, its revenue is up 1.5%.
We'd prefer higher revenue growth, but the modest improvement in EPS is good. So there are some positives here, but not enough to earn high praise. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Proteomics International Laboratories Limited Been A Good Investment?
Most shareholders would probably be pleased with Proteomics International Laboratories Limited for providing a total return of 167% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
As we noted earlier, Proteomics International Laboratories pays its CEO in line with similar-sized companies belonging to the same industry. However, the company's EPS growth numbers over the last three years is not that impressive. Meanwhile, shareholder returns have remained positive over the same time frame. There is room for improved company performance, but we don't see the CEO compensation as a big issue here.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 5 warning signs (and 1 which is concerning) in Proteomics International Laboratories we think you should know about.
Important note: Proteomics International Laboratories 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.
This article by Simply Wall St is general in nature. 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.
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