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Is Prescient Therapeutics Limited (ASX:PTX) Excessively Paying Its CEO?

Simply Wall St

In 2016 Yatomi-Clarke Lee was appointed CEO of Prescient Therapeutics Limited (ASX:PTX). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Prescient Therapeutics

How Does Yatomi-Clarke Lee's Compensation Compare With Similar Sized Companies?

According to our data, Prescient Therapeutics Limited has a market capitalization of AU$16m, and pays its CEO total annual compensation worth AU$479k. (This number is for the twelve months until June 2018). We think total compensation is more important but we note that the CEO salary is lower, at AU$330k. We looked at a group of companies with market capitalizations under AU$295m, and the median CEO total compensation was AU$355k.

As you can see, Yatomi-Clarke Lee is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Prescient Therapeutics Limited is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see, below, how CEO compensation at Prescient Therapeutics has changed over time.

ASX:PTX CEO Compensation, August 23rd 2019

Is Prescient Therapeutics Limited Growing?

Over the last three years Prescient Therapeutics Limited has grown its earnings per share (EPS) by an average of 27% per year (using a line of best fit). It achieved revenue growth of 22% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. You might want to check this free visual report on analyst forecasts for future earnings.

Has Prescient Therapeutics Limited Been A Good Investment?

Given the total loss of 61% over three years, many shareholders in Prescient Therapeutics Limited are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We compared the total CEO remuneration paid by Prescient Therapeutics Limited, 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, the earnings per share growth over three years is certainly impressive. On the other hand returns to investors over the same period have probably disappointed many. While EPS is positive, we'd say shareholders would want better returns before the CEO is paid much more. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Prescient Therapeutics.

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.