How Much Is Alterity Therapeutics Limited (ASX:ATH) CEO Getting Paid?

Geoffrey Kempler has been the CEO of Alterity Therapeutics Limited (ASX:ATH) since 2005, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Alterity Therapeutics.

See our latest analysis for Alterity Therapeutics

How Does Total Compensation For Geoffrey Kempler Compare With Other Companies In The Industry?

Our data indicates that Alterity Therapeutics Limited has a market capitalization of AU$67m, and total annual CEO compensation was reported as AU$446k for the year to June 2020. That's a modest increase of 5.2% on the prior year. Notably, the salary which is AU$412.5k, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below AU$270m, reported a median total CEO compensation of AU$442k. This suggests that Alterity Therapeutics remunerates its CEO largely in line with the industry average. Furthermore, Geoffrey Kempler directly owns AU$612k worth of shares in the company.

On an industry level, around 65% of total compensation represents salary and 35% is other remuneration. According to our research, Alterity Therapeutics has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Alterity Therapeutics Limited's Growth

Over the last three years, Alterity Therapeutics Limited has shrunk its earnings per share by 5.7% per year. It saw its revenue drop 52% over the last year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Alterity Therapeutics Limited Been A Good Investment?

Given the total shareholder loss of 53% over three years, many shareholders in Alterity Therapeutics 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 touched on above, Alterity Therapeutics Limited is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Meanwhile, EPS growth and shareholder returns have been in the red for the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 6 warning signs for Alterity Therapeutics (of which 3 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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