What Can We Learn About Kazia Therapeutics' (ASX:KZA) CEO Compensation?

James Garner has been the CEO of Kazia Therapeutics Limited (ASX:KZA) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Kazia Therapeutics pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Kazia Therapeutics

Comparing Kazia Therapeutics Limited's CEO Compensation With the industry

According to our data, Kazia Therapeutics Limited has a market capitalization of AU$139m, and paid its CEO total annual compensation worth AU$945k over the year to June 2020. That's a notable increase of 37% on last year. In particular, the salary of AU$473.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below AU$261m, reported a median total CEO compensation of AU$444k. Accordingly, our analysis reveals that Kazia Therapeutics Limited pays James Garner north of the industry median. Moreover, James Garner also holds AU$490k worth of Kazia Therapeutics stock directly under their own name.

Talking in terms of the industry, salary represented approximately 66% of total compensation out of all the companies we analyzed, while other remuneration made up 34% of the pie. In Kazia Therapeutics' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Kazia Therapeutics Limited's Growth Numbers

Over the last three years, Kazia Therapeutics Limited has not seen its earnings per share change much, though there is a slight positive movement. It saw its revenue drop 31% over the last year.

We would argue that the lack of revenue growth in the last year is less than ideal, but the modest improvement in EPS is good. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 132% 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...

As we touched on above, Kazia Therapeutics Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Importantly though, shareholder returns for the last three years have been excellent. On the other hand, EPS growth — over the same period — is not as impressive. All things considered, we don't think there's a reason to criticize CEO compensation, though we hope Kazia Therapeutics will post healthier EPS growth moving forward.

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. We identified 4 warning signs for Kazia Therapeutics (3 are potentially serious!) that you should be aware of before investing here.

Switching gears from Kazia Therapeutics, 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. 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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