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Should You Worry About Lightbridge Corporation's (NASDAQ:LTBR) CEO Pay Cheque?

Simply Wall St

Seth Grae has been the CEO of Lightbridge Corporation (NASDAQ:LTBR) since 2006. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. 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.

Check out our latest analysis for Lightbridge

How Does Seth Grae's Compensation Compare With Similar Sized Companies?

According to our data, Lightbridge Corporation has a market capitalization of US$31m, and pays its CEO total annual compensation worth US$934k. (This figure is for the year to December 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$449k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$424k.

Thus we can conclude that Seth Grae receives more in total compensation than the median of a group of companies in the same market, and of similar size to Lightbridge Corporation. However, this doesn't necessarily mean the pay 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 Lightbridge, below.

NasdaqCM:LTBR CEO Compensation, April 12th 2019
NasdaqCM:LTBR CEO Compensation, April 12th 2019

Is Lightbridge Corporation Growing?

Lightbridge Corporation has increased its earnings per share (EPS) by an average of 21% a year, over the last three years (using a line of best fit). 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. Although we don't have analyst forecasts, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Lightbridge Corporation Been A Good Investment?

Given the total loss of 68% over three years, many shareholders in Lightbridge Corporation are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

We compared the total CEO remuneration paid by Lightbridge Corporation, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

However we must not forget that the EPS growth has been very strong over three years. However, the returns to investors are far less impressive, over the same period. Considering the per share profit growth, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. So you may want to check if insiders are buying Lightbridge shares with their own money (free access).

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.

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.