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Is KalVista Pharmaceuticals, Inc.'s (NASDAQ:KALV) CEO Overpaid Relative To Its Peers?

Simply Wall St

In 2016 Andy Crockett was appointed CEO of KalVista Pharmaceuticals, Inc. (NASDAQ:KALV). 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. 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.

View our latest analysis for KalVista Pharmaceuticals

How Does Andy Crockett's Compensation Compare With Similar Sized Companies?

According to our data, KalVista Pharmaceuticals, Inc. has a market capitalization of US$292m, and paid its CEO total annual compensation worth US$3.3m over the year to April 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$505k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We looked at a group of companies with market capitalizations from US$100m to US$400m, and the median CEO total compensation was US$1.1m.

As you can see, Andy Crockett is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean KalVista Pharmaceuticals, Inc. 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 a visual representation of the CEO compensation at KalVista Pharmaceuticals, below.

NasdaqGM:KALV CEO Compensation, February 5th 2020

Is KalVista Pharmaceuticals, Inc. Growing?

On average over the last three years, KalVista Pharmaceuticals, Inc. has grown earnings per share (EPS) by 73% each year (using a line of best fit). It saw its revenue drop 14% over the last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. You might want to check this free visual report on analyst forecasts for future earnings.

Has KalVista Pharmaceuticals, Inc. Been A Good Investment?

Most shareholders would probably be pleased with KalVista Pharmaceuticals, Inc. for providing a total return of 135% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

We examined the amount KalVista Pharmaceuticals, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of 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. So, considering this good performance, the CEO compensation may be quite appropriate. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling KalVista Pharmaceuticals (free visualization of insider trades).

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.

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.