Gene Kinney became the CEO of Prothena Corporation plc (NASDAQ:PRTA) in 2016. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Gene Kinney's Compensation Compare With Similar Sized Companies?
According to our data, Prothena Corporation plc has a market capitalization of US$340m, and paid its CEO total annual compensation worth US$11m over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$525k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. When we examined a selection of companies with market caps ranging from US$200m to US$800m, we found the median CEO total compensation was US$1.8m.
Thus we can conclude that Gene Kinney receives more in total compensation than the median of a group of companies in the same market, and of similar size to Prothena Corporation plc. However, this doesn't necessarily mean the pay 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 Prothena has changed from year to year.
Is Prothena Corporation plc Growing?
Over the last three years Prothena Corporation plc has grown its earnings per share (EPS) by an average of 7.2% per year (using a line of best fit). Its revenue is down 16% over last year.
I generally like to see a little revenue growth, but it is good to see EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. Shareholders might be interested in this free visualization of analyst forecasts.
Has Prothena Corporation plc Been A Good Investment?
With a three year total loss of 86%, Prothena Corporation plc would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
We compared total CEO remuneration at Prothena Corporation plc with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
The growth in the business has been uninspiring, but the shareholder returns have arguably been worse, over the last three years. Shareholders may wish to consider further research. Although we don't think the CEO pay is too high, it is probably more on the generous side of things. Shareholders may want to check for free if Prothena insiders are buying or selling shares.
Important note: Prothena may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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