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Here's What We Think About Kindred Biosciences' (NASDAQ:KIN) CEO Pay

Simply Wall St
·3 min read

This article will reflect on the compensation paid to Richard Chin who has served as CEO of Kindred Biosciences, Inc. (NASDAQ:KIN) since 2012. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Kindred Biosciences.

See our latest analysis for Kindred Biosciences

Comparing Kindred Biosciences, Inc.'s CEO Compensation With the industry

At the time of writing, our data shows that Kindred Biosciences, Inc. has a market capitalization of US$155m, and reported total annual CEO compensation of US$3.6m for the year to December 2019. Notably, that's an increase of 22% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$620k.

For comparison, other companies in the same industry with market capitalizations ranging between US$100m and US$400m had a median total CEO compensation of US$1.6m. Hence, we can conclude that Richard Chin is remunerated higher than the industry median. What's more, Richard Chin holds US$7.9m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component

2019

2018

Proportion (2019)

Salary

US$620k

US$520k

17%

Other

US$3.0m

US$2.4m

83%

Total Compensation

US$3.6m

US$2.9m

100%

On an industry level, around 24% of total compensation represents salary and 76% is other remuneration. Kindred Biosciences pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
ceo-compensation

A Look at Kindred Biosciences, Inc.'s Growth Numbers

Kindred Biosciences, Inc. has seen its earnings per share (EPS) increase by 4.0% a year over the past three years. Its revenue is up 919% over the last year.

It's hard to interpret the strong revenue growth as anything other than a positive. Combined with modest EPS growth, we get a good impression of the company. We wouldn't say this is necessarily top notch growth, but it is certainly promising. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Kindred Biosciences, Inc. Been A Good Investment?

With a three year total loss of 45% for the shareholders, Kindred Biosciences, Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As previously discussed, Richard is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. The growth in the business has been uninspiring, but the shareholder returns for Kindred Biosciences have arguably been worse, over the last three years. This doesn't look great when you consider Richard is taking home compensation north of the industry average. With such poor returns, we would understand if shareholders had concerns related to the CEO's pay.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 2 warning signs for Kindred Biosciences that investors should look into moving forward.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.