The decent performance at Protagonist Therapeutics, Inc. (NASDAQ:PTGX) recently will please most shareholders as they go into the AGM coming up on 27 May 2021. This would also be a chance for them to hear the board review the financial results, discuss future company strategy to further improve the business and vote on any resolutions such as executive remuneration. Here is our take on why we think CEO compensation is fair and may even warrant a raise.
How Does Total Compensation For Dinesh Patel Compare With Other Companies In The Industry?
At the time of writing, our data shows that Protagonist Therapeutics, Inc. has a market capitalization of US$1.4b, and reported total annual CEO compensation of US$2.2m for the year to December 2020. We note that's an increase of 14% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$565k.
On examining similar-sized companies in the industry with market capitalizations between US$1.0b and US$3.2b, we discovered that the median CEO total compensation of that group was US$4.9m. That is to say, Dinesh Patel is paid under the industry median. What's more, Dinesh Patel holds US$13m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Speaking on an industry level, nearly 19% of total compensation represents salary, while the remainder of 81% is other remuneration. It's interesting to note that Protagonist Therapeutics pays out a greater portion of remuneration through salary, compared to the 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 Protagonist Therapeutics, Inc.'s Growth Numbers
Protagonist Therapeutics, Inc. has reduced its earnings per share by 13% a year over the last three years. In the last year, its revenue is up 1,245%.
The reduction in EPS, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. In conclusion we can't form a strong opinion about business performance yet; but it's one 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 Protagonist Therapeutics, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Protagonist Therapeutics, Inc. for providing a total return of 398% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
While the company seems to be headed in the right direction performance-wise, there's always room for improvement. If it continues on the same road, shareholders might feel even more confident about their investment, and have little to no objections concerning CEO pay. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.
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 did our research and spotted 3 warning signs for Protagonist Therapeutics that investors should look into moving forward.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
If you decide to trade Protagonist Therapeutics, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all 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.