This article will reflect on the compensation paid to Richard Lipscombe who has served as CEO of Proteomics International Laboratories Limited (ASX:PIQ) since 2014. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Comparing Proteomics International Laboratories Limited's CEO Compensation With the industry
At the time of writing, our data shows that Proteomics International Laboratories Limited has a market capitalization of AU$90m, and reported total annual CEO compensation of AU$299k for the year to June 2020. We note that's an increase of 44% above last year. In particular, the salary of AU$250.0k, makes up a huge portion of the total compensation being paid to the CEO.
In comparison with other companies in the industry with market capitalizations under AU$258m, the reported median total CEO compensation was AU$264k. This suggests that Proteomics International Laboratories remunerates its CEO largely in line with the industry average. Furthermore, Richard Lipscombe directly owns AU$16m worth of shares in the company, implying that they are deeply invested in the company's success.
On an industry level, around 72% of total compensation represents salary and 28% is other remuneration. Proteomics International Laboratories is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at Proteomics International Laboratories Limited's Growth Numbers
Earnings per share at Proteomics International Laboratories Limited are much the same as they were three years ago, albeit with slightly higher. Its revenue is up 1.5% over the last year.
We would argue that the improvement in revenue is good, but isn't particularly impressive, but the modest improvement in EPS is good. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Proteomics International Laboratories Limited Been A Good Investment?
We think that the total shareholder return of 197%, over three years, would leave most Proteomics International Laboratories Limited shareholders smiling. 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.
As previously discussed, Richard is compensated close to the median for companies of its size, and which belong to the same industry. But the company has been found wanting in terms of EPS growth over the past three years. On the other hand, shareholder returns over the same period have been very healthy. So while shareholders shouldn't be overly concerned about CEO compensation, we suspect most would prefer to see improved performance, before a bump in pay.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 5 warning signs for Proteomics International Laboratories (of which 1 is potentially serious!) that you should know about in order to have a holistic understanding of the 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.
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