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Does Clinuvel Pharmaceuticals Limited's (ASX:CUV) CEO Pay Reflect Performance?

Simply Wall St

Philippe Wolgen has been the CEO of Clinuvel Pharmaceuticals Limited (ASX:CUV) since 2005. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

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View our latest analysis for Clinuvel Pharmaceuticals

How Does Philippe Wolgen's Compensation Compare With Similar Sized Companies?

According to our data, Clinuvel Pharmaceuticals Limited has a market capitalization of AU$1.5b, and pays its CEO total annual compensation worth AU$2.3m. (This is based on the year to June 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$818k. When we examined a selection of companies with market caps ranging from AU$579m to AU$2.3b, we found the median CEO total compensation was AU$1.3m.

As you can see, Philippe Wolgen is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Clinuvel Pharmaceuticals 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 Clinuvel Pharmaceuticals has changed over time.

ASX:CUV CEO Compensation, May 21st 2019

Is Clinuvel Pharmaceuticals Limited Growing?

Clinuvel Pharmaceuticals Limited has increased its earnings per share (EPS) by an average of 100% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 62%.

This demonstrates that the company has been improving recently. A good result. 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 Clinuvel Pharmaceuticals Limited Been A Good Investment?

Boasting a total shareholder return of 501% over three years, Clinuvel Pharmaceuticals 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 the total CEO remuneration paid by Clinuvel Pharmaceuticals 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. On top of that, in the same period, returns to shareholders have been great. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. Shareholders may want to check for free if Clinuvel Pharmaceuticals insiders are buying or selling shares.

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.

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.