Genetic Technologies Limited's (ASX:GTG) CEO Will Probably Find It Hard To See A Huge Raise This Year

Key Insights

• Genetic Technologies' Annual General Meeting to take place on 21st of November
• Salary of AU$330.6k is part of CEO Simon Morriss's total remuneration
• The overall pay is comparable to the industry average
• Over the past three years, Genetic Technologies' EPS grew by 9.0% and over the past three years, the total loss to shareholders 71%

Shareholders of Genetic Technologies Limited (ASX:GTG) will have been dismayed by the negative share price return over the last three years. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 21st of November. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

View our latest analysis for Genetic Technologies

How Does Total Compensation For Simon Morriss Compare With Other Companies In The Industry?

Our data indicates that Genetic Technologies Limited has a market capitalization of AU$23m, and total annual CEO compensation was reported as AU$588k for the year to June 2023. That's slightly lower by 6.5% over the previous year. We note that the salary of AU$330.6k makes up a sizeable portion of the total compensation received by the CEO.

In comparison with other companies in the Australia Life Sciences industry with market capitalizations under AU$306m, the reported median total CEO compensation was AU$573k. From this we gather that Simon Morriss is paid around the median for CEOs in the industry.

Component	2023	2022	Proportion (2023)
Salary	AU$331k	AU$347k	56%
Other	AU$257k	AU$282k	44%
Total Compensation	AU$588k	AU$629k	100%

Talking in terms of the industry, salary represented approximately 79% of total compensation out of all the companies we analyzed, while other remuneration made up 21% of the pie. Genetic Technologies pays a modest slice of remuneration through salary, as compared to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Genetic Technologies Limited's Growth

Genetic Technologies Limited's earnings per share (EPS) grew 9.0% per year over the last three years. It achieved revenue growth of 12% over the last year.

We think the revenue growth is good. And the modest growth in EPS isn't bad, either. Although we'll stop short of calling the stock a top performer, we think the company has potential. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Genetic Technologies Limited Been A Good Investment?

Few Genetic Technologies Limited shareholders would feel satisfied with the return of -71% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would be keen to know what's holding the stock back when earnings have grown. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 5 warning signs (and 3 which are significant) in Genetic Technologies we think you should know about.

Switching gears from Genetic Technologies, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.