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A Quick Analysis On Benitec Biopharma's (NASDAQ:BNTC) CEO Compensation

Jerel Banks became the CEO of Benitec Biopharma Inc. (NASDAQ:BNTC) in 2018, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Benitec Biopharma.

See our latest analysis for Benitec Biopharma

Comparing Benitec Biopharma Inc.'s CEO Compensation With the industry

At the time of writing, our data shows that Benitec Biopharma Inc. has a market capitalization of US$13m, and reported total annual CEO compensation of US$632k for the year to June 2020. That's mostly flat as compared to the prior year's compensation. In particular, the salary of US$400.0k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$1.0m. This suggests that Jerel Banks is paid below the industry median.

Component

2020

2019

Proportion (2020)

Salary

US$400k

US$400k

63%

Other

US$232k

US$215k

37%

Total Compensation

US$632k

US$615k

100%

On an industry level, around 25% of total compensation represents salary and 75% is other remuneration. According to our research, Benitec Biopharma has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

ceo-compensation
ceo-compensation

Benitec Biopharma Inc.'s Growth

Over the past three years, Benitec Biopharma Inc. has seen its earnings per share (EPS) grow by 22% per year. In the last year, its revenue is down 98%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Benitec Biopharma Inc. Been A Good Investment?

Since shareholders would have lost about 93% over three years, some Benitec Biopharma Inc. investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As we touched on above, Benitec Biopharma Inc. is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However we must not forget that the EPS growth has been very strong over three years. It's tough to criticize CEO compensation when the per-share EPS movement is positive. But shareholders will likely want to hold off on any raise for Jerel until investor returns are positive.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 5 warning signs for Benitec Biopharma (of which 3 are potentially serious!) that you should know about in order to have a holistic understanding of the stock.

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.

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