How Does Starpharma Holdings' (ASX:SPL) CEO Salary Compare to Peers?

This article will reflect on the compensation paid to Jackie Fairley who has served as CEO of Starpharma Holdings Limited (ASX:SPL) since 2006. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Starpharma Holdings.

View our latest analysis for Starpharma Holdings

How Does Total Compensation For Jackie Fairley Compare With Other Companies In The Industry?

At the time of writing, our data shows that Starpharma Holdings Limited has a market capitalization of AU$528m, and reported total annual CEO compensation of AU$1.4m for the year to June 2020. That's a notable decrease of 17% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at AU$519k.

On comparing similar companies from the same industry with market caps ranging from AU$269m to AU$1.1b, we found that the median CEO total compensation was AU$1.3m. This suggests that Starpharma Holdings remunerates its CEO largely in line with the industry average. Furthermore, Jackie Fairley directly owns AU$5.0m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 66% of total compensation represents salary, while the remainder of 34% is other remuneration. Starpharma Holdings sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Starpharma Holdings Limited's Growth Numbers

Over the last three years, Starpharma Holdings Limited has shrunk its earnings per share by 1.2% per year. Its revenue is up 141% over the last year.

Investors would be a bit wary of companies that have lower EPS But on the other hand, revenue growth is strong, suggesting a brighter future. 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. 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 Starpharma Holdings Limited Been A Good Investment?

Since shareholders would have lost about 7.6% over three years, some Starpharma Holdings Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As we touched on above, Starpharma Holdings Limited is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, revenues have increased over the past year, a positive sign for the company. On the other hand, shareholder returns for Jackie are negative over the same period. EPS growth is also negative, adding insult to injury. Overall, we wouldn't say CEO is highly paid, but shareholders might not go for a raise before business metrics start to improve precipitously.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 3 warning signs for Starpharma Holdings that investors should be aware of in a dynamic business environment.

Switching gears from Starpharma Holdings, 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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