Is Starpharma Holdings Limited (ASX:SPL) Overpaying Its CEO?

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Jackie Fairley has been the CEO of Starpharma Holdings Limited (ASX:SPL) since 2006. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Starpharma Holdings

How Does Jackie Fairley’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Starpharma Holdings Limited has a market cap of AU$517m, and is paying total annual CEO compensation of AU$1.7m. (This figure is for the year to June 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at AU$475k. When we examined a selection of companies with market caps ranging from AU$287m to AU$1.1b, we found the median CEO total compensation was AU$972k.

As you can see, Jackie Fairley is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Starpharma Holdings Limited is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see, below, how CEO compensation at Starpharma Holdings has changed over time.

ASX:SPL CEO Compensation, July 8th 2019
ASX:SPL CEO Compensation, July 8th 2019

Is Starpharma Holdings Limited Growing?

Over the last three years Starpharma Holdings Limited has grown its earnings per share (EPS) by an average of 31% per year (using a line of best fit). The trailing twelve months of revenue was pretty much the same as the prior period.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s also good to see modest revenue growth, suggesting the underlying business is healthy.

Has Starpharma Holdings Limited Been A Good Investment?

Boasting a total shareholder return of 119% over three years, Starpharma Holdings Limited has done well by shareholders. 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.

In Summary…

We compared total CEO remuneration at Starpharma Holdings Limited with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. On top of that, in the same period, returns to shareholders have been great. As a result of this good performance, the CEO remuneration may well be quite reasonable. Shareholders may want to check for free if Starpharma Holdings insiders are buying or selling shares.

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.