We Take A Look At Why Kazia Therapeutics Limited's (ASX:KZA) CEO Compensation Is Well Earned

The performance at Kazia Therapeutics Limited (ASX:KZA) has been quite strong recently and CEO James Garner has played a role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 09 November 2021. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.

Check out our latest analysis for Kazia Therapeutics

How Does Total Compensation For James Garner Compare With Other Companies In The Industry?

According to our data, Kazia Therapeutics Limited has a market capitalization of AU$208m, and paid its CEO total annual compensation worth AU$1.1m over the year to June 2021. Notably, that's an increase of 20% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at AU$503k.

On examining similar-sized companies in the industry with market capitalizations between AU$135m and AU$538m, we discovered that the median CEO total compensation of that group was AU$910k. So it looks like Kazia Therapeutics compensates James Garner in line with the median for the industry. What's more, James Garner holds AU$707k worth of shares in the company in their own name.

Component	2021	2020	Proportion (2021)
Salary	AU$503k	AU$473k	44%
Other	AU$630k	AU$472k	56%
Total Compensation	AU$1.1m	AU$945k	100%

Speaking on an industry level, nearly 55% of total compensation represents salary, while the remainder of 45% is other remuneration. Kazia Therapeutics pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Kazia Therapeutics Limited's Growth Numbers

Kazia Therapeutics Limited's earnings per share (EPS) grew 19% per year over the last three years. It achieved revenue growth of 1,437% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Kazia Therapeutics Limited Been A Good Investment?

Boasting a total shareholder return of 300% over three years, Kazia Therapeutics Limited has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Given the improved performance, shareholders may be more forgiving of CEO compensation in the upcoming AGM. However, despite the strong growth in earnings and share price growth, the focus for shareholders would be how the company plans to steer the company towards sustainable profitability in the near future.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for Kazia Therapeutics that investors should think about before committing capital to this 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.

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.

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