Gene Kinney has been the CEO of Prothena Corporation plc (NASDAQ:PRTA) since 2016. First, this article will compare CEO compensation with compensation at similar sized companies. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Gene Kinney's Compensation Compare With Similar Sized Companies?
According to our data, Prothena Corporation plc has a market capitalization of US$499m, and paid its CEO total annual compensation worth US$3.2m over the year to December 2019. That's less than last year. While we always look at total compensation first, we note that the salary component is less, at US$538k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$200m to US$800m. The median total CEO compensation was US$2.2m.
Next, let's break down remuneration compositions to understand how the industry and company compare with each other. On an industry level, roughly 22% of total compensation represents salary and 78% is other remuneration. Our data reveals that Prothena allocates salary in line with the wider market.
It would therefore appear that Prothena Corporation plc pays Gene Kinney more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration 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. You can see a visual representation of the CEO compensation at Prothena, below.
Is Prothena Corporation plc Growing?
Prothena Corporation plc has seen earnings per share (EPS) move positively by an average of 24% a year, over the last three years (using a line of best fit). In the last year, its revenue is down 15%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. Revenue growth is a real positive for growth, but ultimately profits are more important. It could be important to check this free visual depiction of what analysts expect for the future.
Has Prothena Corporation plc Been A Good Investment?
With a three year total loss of 77%, Prothena Corporation plc would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
We compared the total CEO remuneration paid by Prothena Corporation plc, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. However, the returns to investors are far less impressive, over the same period. Considering positive per-share earnings movement, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. Shifting gears from CEO pay for a second, we've spotted 3 warning signs for Prothena you should be aware of, and 1 of them shouldn't be ignored.
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.
If you spot an error that warrants correction, please contact the editor at email@example.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.
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