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Is LBT Innovations Limited's (ASX:LBT) CEO Pay Justified?

Simply Wall St

Brent Barnes has been the CEO of LBT Innovations Limited (ASX:LBT) since 2016. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for LBT Innovations

How Does Brent Barnes's Compensation Compare With Similar Sized Companies?

According to our data, LBT Innovations Limited has a market capitalization of AU$48m, and paid its CEO total annual compensation worth AU$401k over the year to June 2019. That's below the compensation, last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$288k. We looked at a group of companies with market capitalizations under AU$290m, and the median CEO total compensation was AU$379k.

That means Brent Barnes receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.

You can see a visual representation of the CEO compensation at LBT Innovations, below.

ASX:LBT CEO Compensation, November 5th 2019

Is LBT Innovations Limited Growing?

Over the last three years LBT Innovations Limited has shrunk its earnings per share by an average of 48% per year (measured with a line of best fit). It saw its revenue drop 55% over the last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. It could be important to check this free visual depiction of what analysts expect for the future.

Has LBT Innovations Limited Been A Good Investment?

Given the total loss of 57% over three years, many shareholders in LBT Innovations Limited are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Brent Barnes is paid around what is normal the leaders of comparable size companies.

The company isn't growing EPS, and shareholder returns have been disappointing. Few would argue that it's wise for the company to pay any more, before returns improve. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling LBT Innovations (free visualization of insider trades).

If you want to buy a stock that is better than LBT Innovations, 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.