What We Learned About Bio-Gene Technology's (ASX:BGT) CEO Compensation

Richard Jagger has been the CEO of Bio-Gene Technology Limited (ASX:BGT) since 2018, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

View our latest analysis for Bio-Gene Technology

Comparing Bio-Gene Technology Limited's CEO Compensation With the industry

At the time of writing, our data shows that Bio-Gene Technology Limited has a market capitalization of AU$22m, and reported total annual CEO compensation of AU$466k for the year to June 2020. That's a notable increase of 36% on last year. We note that the salary portion, which stands at AU$239.2k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the industry with market capitalizations below AU$257m, we found that the median total CEO compensation was AU$351k. This suggests that Richard Jagger is paid more than the median for the industry. Furthermore, Richard Jagger directly owns AU$782k worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 69% of total compensation represents salary, while the remainder of 31% is other remuneration. Bio-Gene Technology sets aside a smaller share of compensation for salary, in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Bio-Gene Technology Limited's Growth Numbers

Bio-Gene Technology Limited saw earnings per share stay pretty flat over the last three years. It achieved revenue growth of 907% over the last year.

It's hard to interpret the strong revenue growth as anything other than a positive. Combined with modest EPS growth, we get a good impression of the company. So while we'd stop short of saying growth is absolutely outstanding, there are definitely some clear positives! 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.

Has Bio-Gene Technology Limited Been A Good Investment?

Given the total shareholder loss of 26% over three years, many shareholders in Bio-Gene Technology Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we noted earlier, Bio-Gene Technology pays its CEO higher than the norm for similar-sized companies belonging to the same industry. While we have not been overly impressed by the business performance, the shareholder returns have been utterly depressing, over the last three years. This doesn't look good when you see that Richard is earning more than the industry median. Taking all this into account, it could be hard to get shareholder support for giving Richard a raise.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 5 warning signs for Bio-Gene Technology (of which 1 is a bit concerning!) that you should know about in order to have a holistic understanding of the stock.

Important note: Bio-Gene Technology 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.

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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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