Is BrainChip Holdings Limited's (ASX:BRN) CEO Paid At A Competitive Rate?
Lou DiNardo became the CEO of BrainChip Holdings Limited (ASX:BRN) in 2016. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. 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.
Check out our latest analysis for BrainChip Holdings
How Does Lou DiNardo's Compensation Compare With Similar Sized Companies?
Our data indicates that BrainChip Holdings Limited is worth AU$70m, and total annual CEO compensation was reported as US$4.2m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$406k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO total compensation to be US$254k.
As you can see, Lou DiNardo is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean BrainChip 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 BrainChip Holdings has changed over time.
Is BrainChip Holdings Limited Growing?
BrainChip Holdings Limited has seen earnings per share (EPS) move in a positive direction by an average of 30% a year, over the last three years (using a line of best fit). It saw its revenue drop 21% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. Shareholders might be interested in this free visualization of analyst forecasts.
Has BrainChip Holdings Limited Been A Good Investment?
Since shareholders would have lost about 80% 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 compared the total CEO remuneration paid by BrainChip Holdings Limited, and compared it to remuneration at a group of similar-sized companies. Our data suggests that it pays above the median CEO pay within that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. However, the overall EPS figure remains negative, and that can be a bone of contention for many investors. Meanwhile, returns to investors over the same period have probably disappointed many. That is why we have come to the conclusion that shareholders would want better returns before the CEO is paid much more. Shareholders may want to check for free if BrainChip 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.
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.
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. Thank you for reading.
