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Is BrainChip Holdings Limited (ASX:BRN) Overpaying Its CEO?

Simply Wall St

Lou DiNardo became the CEO of BrainChip Holdings Limited (ASX:BRN) in 2016. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for BrainChip Holdings

How Does Lou DiNardo's Compensation Compare With Similar Sized Companies?

According to our data, BrainChip Holdings Limited has a market capitalization of AU$62m, and pays its CEO total annual compensation worth US$2.3m. (This number is for the twelve months until December 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$430k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$254k.

It would therefore appear that BrainChip Holdings Limited pays Lou DiNardo more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

The graphic below shows how CEO compensation at BrainChip Holdings has changed from year to year.

ASX:BRN CEO Compensation, April 11th 2019

Is BrainChip Holdings Limited Growing?

BrainChip Holdings Limited has increased its earnings per share (EPS) by an average of 58% a year, over the last three years (using a line of best fit). Its revenue is up 252% over last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. You might want to check this free visual report on analyst forecasts for future earnings.

Has BrainChip Holdings Limited Been A Good Investment?

Since shareholders would have lost about 68% over three years, some BrainChip Holdings Limited shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

We examined the amount BrainChip Holdings Limited pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

However, the earnings per share growth over three years is certainly impressive. However, the returns to investors are far less impressive, over the same period. While EPS is positive, we'd say shareholders would want better returns before the CEO is paid much more. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling BrainChip Holdings (free visualization of insider trades).

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.