Andy Crockett has been the CEO of KalVista Pharmaceuticals, Inc. (NASDAQ:KALV) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether KalVista Pharmaceuticals pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
How Does Total Compensation For Andy Crockett Compare With Other Companies In The Industry?
At the time of writing, our data shows that KalVista Pharmaceuticals, Inc. has a market capitalization of US$247m, and reported total annual CEO compensation of US$1.7m for the year to April 2020. We note that's a decrease of 47% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$556k.
On examining similar-sized companies in the industry with market capitalizations between US$100m and US$400m, we discovered that the median CEO total compensation of that group was US$1.6m. This suggests that KalVista Pharmaceuticals remunerates its CEO largely in line with the industry average. Furthermore, Andy Crockett directly owns US$3.3m worth of shares in the company, implying that they are deeply invested in the company's success.
Talking in terms of the industry, salary represented approximately 23% of total compensation out of all the companies we analyzed, while other remuneration made up 77% of the pie. KalVista Pharmaceuticals pays out 32% of remuneration in the form of a salary, significantly higher than the industry average. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
KalVista Pharmaceuticals, Inc.'s Growth
KalVista Pharmaceuticals, Inc.'s earnings per share (EPS) grew 16% per year over the last three years. It saw its revenue drop 41% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has KalVista Pharmaceuticals, Inc. Been A Good Investment?
Boasting a total shareholder return of 36% over three years, KalVista Pharmaceuticals, Inc. has done well by shareholders. 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 we noted earlier, KalVista Pharmaceuticals pays its CEO in line with similar-sized companies belonging to the same industry. The company is growing EPS and total shareholder returns have been pleasing. Indeed, many might consider that Andy is compensated rather modestly, given the solid company performance! Stockholders might even be okay with a bump in pay, seeing as how investor returns have been so strong.
CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for KalVista Pharmaceuticals that investors should look into moving forward.
Switching gears from KalVista Pharmaceuticals, 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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