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Our Take On Starpharma Holdings' (ASX:SPL) CEO Salary

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Simply Wall St
·4 min read
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Jackie Fairley has been the CEO of Starpharma Holdings Limited (ASX:SPL) since 2006, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Starpharma Holdings.

See our latest analysis for Starpharma Holdings

Comparing Starpharma Holdings Limited's CEO Compensation With the industry

Our data indicates that Starpharma Holdings Limited has a market capitalization of AU$532m, and total annual CEO compensation was reported as AU$1.4m for the year to June 2020. That's a notable decrease of 17% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at AU$519k.

On examining similar-sized companies in the industry with market capitalizations between AU$271m and AU$1.1b, we discovered that the median CEO total compensation of that group was AU$1.4m. This suggests that Starpharma Holdings remunerates its CEO largely in line with the industry average. Moreover, Jackie Fairley also holds AU$5.1m worth of Starpharma Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component

2020

2019

Proportion (2020)

Salary

AU$519k

AU$492k

36%

Other

AU$928k

AU$1.3m

64%

Total Compensation

AU$1.4m

AU$1.7m

100%

Talking in terms of the industry, salary represented approximately 66% of total compensation out of all the companies we analyzed, while other remuneration made up 34% of the pie. In Starpharma Holdings' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
ceo-compensation

Starpharma Holdings Limited's Growth

Starpharma Holdings Limited has reduced its earnings per share by 1.2% a year over the last three years. Its revenue is up 141% over the last year.

Investors would be a bit wary of companies that have lower EPS But on the other hand, revenue growth is strong, suggesting a brighter future. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Starpharma Holdings Limited Been A Good Investment?

Given the total shareholder loss of 8.1% over three years, many shareholders in Starpharma Holdings Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As we touched on above, Starpharma Holdings Limited is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, revenues have increased over the past year, a positive sign for the company. On the other hand, shareholder returns for Jackie are negative over the same period. EPS growth is also negative, adding insult to injury. It's tough for us to say Jackie is overpaid but a mixed bag in terms of performance will surely irk shareholders and reduce chances of a raise.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 3 warning signs for Starpharma Holdings that investors should look into moving forward.

Important note: Starpharma Holdings is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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.