Our Take On Lepidico's (ASX:LPD) CEO Salary

This article will reflect on the compensation paid to Joe Walsh who has served as CEO of Lepidico Limited (ASX:LPD) since 2016. This analysis will also assess whether Lepidico pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Lepidico

How Does Total Compensation For Joe Walsh Compare With Other Companies In The Industry?

According to our data, Lepidico Limited has a market capitalization of AU$119m, and paid its CEO total annual compensation worth AU$506k over the year to June 2020. That's a notable decrease of 25% on last year. Notably, the salary which is AU$400.5k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under AU$259m, the reported median total CEO compensation was AU$309k. Hence, we can conclude that Joe Walsh is remunerated higher than the industry median. Moreover, Joe Walsh also holds AU$718k worth of Lepidico stock directly under their own name.

On an industry level, roughly 68% of total compensation represents salary and 32% is other remuneration. According to our research, Lepidico has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Lepidico Limited's Growth

Over the past three years, Lepidico Limited has seen its earnings per share (EPS) grow by 28% per year. Its revenue is up 296% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 Lepidico Limited Been A Good Investment?

Since shareholders would have lost about 54% over three years, some Lepidico Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

As previously discussed, Joe is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, the EPS growth is certainly impressive, but it's disappointing to see negative shareholder returns over the same period. Although we'd stop short of calling it inappropriate, we think Joe is earning a very handsome sum.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 6 warning signs for Lepidico (1 is a bit concerning!) that you should be aware of before investing here.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

If you’re looking to trade Lepidico, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.