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Does Probiotec Limited's (ASX:PBP) CEO Pay Reflect Performance?

Simply Wall St

Wes Stringer became the CEO of Probiotec Limited (ASX:PBP) in 2015. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. 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.

See our latest analysis for Probiotec

How Does Wes Stringer's Compensation Compare With Similar Sized Companies?

Our data indicates that Probiotec Limited is worth AU$94m, and total annual CEO compensation is AU$440k. (This figure is for the year to June 2019). That's less than last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$343k. We took a group of companies with market capitalizations below AU$297m, and calculated the median CEO total compensation to be AU$362k.

So Wes Stringer receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

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

ASX:PBP CEO Compensation, September 2nd 2019

Is Probiotec Limited Growing?

Probiotec Limited has increased its earnings per share (EPS) by an average of 15% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 19%.

This shows that the company has improved itself over the last few years. Good news for shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Probiotec Limited Been A Good Investment?

I think that the total shareholder return of 252%, over three years, would leave most Probiotec Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Remuneration for Wes Stringer is close enough to the median pay for a CEO of a similar sized company .

The company is growing earnings per share and total shareholder returns have been pleasing. Indeed, many might consider the pay rather modest, given the solid company performance! Shareholders may want to check for free if Probiotec insiders are buying or selling shares.

If you want to buy a stock that is better than Probiotec, this free list of high return, low debt companies is a great place to look.

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.