Does Prescient Therapeutics' (ASX:PTX) CEO Salary Compare Well With The Performance Of The Company?

Yatomi-Clarke Lee has been the CEO of Prescient Therapeutics Limited (ASX:PTX) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Prescient Therapeutics

Comparing Prescient Therapeutics Limited's CEO Compensation With the industry

According to our data, Prescient Therapeutics Limited has a market capitalization of AU$42m, and paid its CEO total annual compensation worth AU$639k over the year to June 2020. We note that's an increase of 9.1% above last year. In particular, the salary of AU$392.0k, 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$257m, the reported median total CEO compensation was AU$408k. This suggests that Yatomi-Clarke Lee is paid more than the median for the industry. What's more, Yatomi-Clarke Lee holds AU$359k worth of shares in the company in their own name.

Talking in terms of the industry, salary represented approximately 65% of total compensation out of all the companies we analyzed, while other remuneration made up 35% of the pie. Prescient Therapeutics is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Prescient Therapeutics Limited's Growth Numbers

Over the past three years, Prescient Therapeutics Limited has seen its earnings per share (EPS) grow by 5.4% per year. It saw its revenue drop 34% 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. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Prescient Therapeutics Limited Been A Good Investment?

With a total shareholder return of 3.3% over three years, Prescient Therapeutics Limited has done okay by shareholders. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

As we touched on above, Prescient 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. However, EPS growth is not moving in the right direction, and the returns to shareholders could have been better, over the last three years. Overall, although the company has delivered steady performance, we would like to see an improvement in key metrics before we can say the high CEO compensation is justified.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 4 warning signs (and 3 which are potentially serious) in Prescient Therapeutics we think you should know about.

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.

If you’re looking to trade Prescient Therapeutics, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.