Most Shareholders Will Probably Find That The CEO Compensation For Proteomics International Laboratories Limited (ASX:PIQ) Is Reasonable

Key Insights

• Proteomics International Laboratories will host its Annual General Meeting on 23rd of November
• Salary of AU$350.0k is part of CEO Richard Lipscombe's total remuneration
• The overall pay is comparable to the industry average
• Proteomics International Laboratories' EPS declined by 28% over the past three years while total shareholder return over the past three years was 55%

Proteomics International Laboratories Limited (ASX:PIQ) has exhibited strong share price growth in the past few years. However, its earnings growth has not kept up, suggesting that there may be something amiss. The upcoming AGM on 23rd of November may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

Check out our latest analysis for Proteomics International Laboratories

Comparing Proteomics International Laboratories Limited's CEO Compensation With The Industry

According to our data, Proteomics International Laboratories Limited has a market capitalization of AU$107m, and paid its CEO total annual compensation worth AU$442k over the year to June 2023. That's a notable increase of 34% on last year. In particular, the salary of AU$350.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Australia Life Sciences industry with market capitalizations below AU$307m, reported a median total CEO compensation of AU$590k. This suggests that Proteomics International Laboratories remunerates its CEO largely in line with the industry average. What's more, Richard Lipscombe holds AU$17m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	AU$350k	AU$265k	79%
Other	AU$92k	AU$65k	21%
Total Compensation	AU$442k	AU$330k	100%

On an industry level, roughly 79% of total compensation represents salary and 21% is other remuneration. Although there is a difference in how total compensation is set, Proteomics International Laboratories more or less reflects the market in terms of setting the salary. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Proteomics International Laboratories Limited's Growth

Proteomics International Laboratories Limited has reduced its earnings per share by 28% a year over the last three years. It saw its revenue drop 7.3% over the last year.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Proteomics International Laboratories Limited Been A Good Investment?

We think that the total shareholder return of 55%, over three years, would leave most Proteomics International Laboratories Limited shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

Although shareholders would be quite happy with the returns they have earned on their initial investment, earnings have failed to grow and this could mean returns may be hard to keep up. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

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 Proteomics International Laboratories (1 is potentially serious!) that you should be aware of before investing here.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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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.