The CEO of Palla Pharma Limited (ASX:PAL) is Jarrod Ritchie. 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. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Jarrod Ritchie's Compensation Compare With Similar Sized Companies?
Our data indicates that Palla Pharma Limited is worth AU$128m, and total annual CEO compensation was reported as AU$904k for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at AU$775k. We took a group of companies with market capitalizations below AU$293m, and calculated the median CEO total compensation to be AU$382k.
It would therefore appear that Palla Pharma Limited pays Jarrod Ritchie 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. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see a visual representation of the CEO compensation at Palla Pharma, below.
Is Palla Pharma Limited Growing?
On average over the last three years, Palla Pharma Limited has grown earnings per share (EPS) by 53% each year (using a line of best fit). In the last year, its revenue is up 33%.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. You might want to check this free visual report on analyst forecasts for future earnings.
Has Palla Pharma Limited Been A Good Investment?
Given the total loss of 63% over three years, many shareholders in Palla Pharma Limited are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
We compared the total CEO remuneration paid by Palla Pharma Limited, 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.
However we must not forget that the EPS growth has been very strong over three years. On the other hand returns to investors over the same period have probably disappointed many. 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. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Palla Pharma.
Important note: Palla Pharma 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.
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