In 2006 Jackie Fairley was appointed CEO of Starpharma Holdings Limited (ASX:SPL). 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. This method should give us information to assess how appropriately the company pays the CEO.
How Does Jackie Fairley's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Starpharma Holdings Limited has a market cap of AU$424m, and reported total annual CEO compensation of AU$1.7m for the year to June 2019. That's a modest increase of 3.0% on the prior year year. We think total compensation is more important but we note that the CEO salary is lower, at AU$492k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We examined companies with market caps from AU$148m to AU$592m, and discovered that the median CEO total compensation of that group was AU$667k.
It would therefore appear that Starpharma Holdings Limited pays Jackie Fairley 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.
The graphic below shows how CEO compensation at Starpharma Holdings has changed from year to year.
Is Starpharma Holdings Limited Growing?
Starpharma Holdings Limited has increased its earnings per share (EPS) 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 45%.
This shows that the company has improved itself over the last few years. Good news for shareholders. Revenue growth is a real positive for growth, but ultimately profits are more important. You might want to check this free visual report on analyst forecasts for future earnings.
Has Starpharma Holdings Limited Been A Good Investment?
Most shareholders would probably be pleased with Starpharma Holdings Limited for providing a total return of 76% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
We examined the amount Starpharma Holdings Limited pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
However we must not forget that the EPS growth has been very strong over three years. Even better, returns to shareholders have been plentiful, over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. So you may want to check if insiders are buying Starpharma Holdings shares with their own money (free access).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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 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. Thank you for reading.