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James Garner has been the CEO of Kazia Therapeutics Limited (ASX:KZA) since 2016. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does James Garner’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Kazia Therapeutics Limited has a market cap of AU$29m, and is paying total annual CEO compensation of AU$620k. (This figure is for the year to 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at AU$425k. We looked at a group of companies with market capitalizations under AU$281m, and the median CEO compensation was AU$362k.
As you can see, James Garner is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Kazia Therapeutics Limited is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at Kazia Therapeutics has changed from year to year.
Is Kazia Therapeutics Limited Growing?
Over the last three years Kazia Therapeutics Limited has grown its earnings per share (EPS) by an average of 25% per year (using a line of best fit). In the last year, its revenue is down -66%.
This shows that the company has improved itself over the last few years. Good news for shareholders. Revenue growth is a real positive for growth, but ultimately profits are more important. It could be important to check this free visual depiction of what analysts expect for the future.
Has Kazia Therapeutics Limited Been A Good Investment?
With a three year total loss of 58%, Kazia Therapeutics Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
We compared the total CEO remuneration paid by Kazia Therapeutics Limited, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
However, the earnings per share growth over three years is certainly impressive. Having said that, shareholders may be disappointed with the weak returns over the last three years. While EPS is positive, we’d say shareholders would want better returns before the CEO is paid much more. Whatever your view on compensation, you might want to check if insiders are buying or selling Kazia Therapeutics shares (free trial).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. On rare occasion, data errors may occur. Thank you for reading.