Is Paradigm Biopharmaceuticals Limited’s (ASX:PAR) CEO Overpaid Relative To Its Peers?

The CEO of Paradigm Biopharmaceuticals Limited (ASX:PAR) is Paul Rennie. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Paradigm Biopharmaceuticals

How Does Paul Rennie’s Compensation Compare With Similar Sized Companies?

Our data indicates that Paradigm Biopharmaceuticals Limited is worth AU$261m, and total annual CEO compensation is AU$573k. (This number is for the twelve months until June 2018). While we always look at total compensation first, we note that the salary component is less, at AU$380k. When we examined a selection of companies with market caps ranging from AU$147m to AU$589m, we found the median CEO total compensation was AU$711k.

So Paul Rennie receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.

You can see, below, how CEO compensation at Paradigm Biopharmaceuticals has changed over time.

ASX:PAR CEO Compensation, August 28th 2019
ASX:PAR CEO Compensation, August 28th 2019

Is Paradigm Biopharmaceuticals Limited Growing?

Over the last three years Paradigm Biopharmaceuticals Limited has shrunk its earnings per share by an average of 15% per year (measured with a line of best fit). In the last year, its revenue is up 50%.

As investors, we are a bit wary of companies that have lower earnings per share, over three years. On the other hand, the strong revenue growth suggests the business is growing. It’s hard to reach a conclusion about business performance right now. This may be one to watch.

Has Paradigm Biopharmaceuticals Limited Been A Good Investment?

Most shareholders would probably be pleased with Paradigm Biopharmaceuticals Limited for providing a total return of 233% over three years. 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…

Remuneration for Paul Rennie is close enough to the median pay for a CEO of a similar sized company .

The company isn’t showing particularly great growth, but shareholder returns have been pleasing. So we can conclude that on this analysis the CEO compensation seems pretty sound. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Paradigm Biopharmaceuticals.

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 editorial-team@simplywallst.com. 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. Thank you for reading.