Yahoo Finance Shareholders May Be More Conservative With Starpharma Holdings Limited's (ASX:SPL) CEO Compensation For Now
Shareholders of Starpharma Holdings Limited (ASX:SPL) will have been dismayed by the negative share price return over the last three years. Per share earnings growth is also poor, despite revenues growing. In light of this performance, shareholders will have a chance to question the board in the upcoming AGM on 29 November 2022, where they can impact on future company performance by voting on resolutions, including executive compensation. We think shareholders may be cautious of approving a pay rise for the CEO at the moment, based on our analysis below.
View our latest analysis for Starpharma Holdings
How Does Total Compensation For Jackie Fairley Compare With Other Companies In The Industry?
Our data indicates that Starpharma Holdings Limited has a market capitalization of AU$217m, and total annual CEO compensation was reported as AU$1.3m for the year to June 2022. Notably, that's a decrease of 18% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at AU$516k.
In comparison with other companies in the industry with market capitalizations under AU$303m, the reported median total CEO compensation was AU$600k. This suggests that Jackie Fairley is paid more than the median for the industry. Moreover, Jackie Fairley also holds AU$2.1m 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 | 2022 | 2021 | Proportion (2022) |
Salary | AU$516k | AU$540k | 41% |
Other | AU$756k | AU$1.0m | 59% |
Total Compensation | AU$1.3m | AU$1.6m | 100% |
Speaking on an industry level, nearly 67% of total compensation represents salary, while the remainder of 33% is other remuneration. Starpharma Holdings pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Starpharma Holdings Limited's Growth
Starpharma Holdings Limited has reduced its earnings per share by 6.5% a year over the last three years. In the last year, its revenue is up 48%.
Investors would be a bit wary of companies that have lower EPS On the other hand, the strong revenue growth suggests the business is growing. 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. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Starpharma Holdings Limited Been A Good Investment?
With a total shareholder return of -59% over three years, Starpharma Holdings Limited shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
The loss to shareholders over the past three years is certainly concerning and possibly has something to do with the fact that the company's earnings haven't grown. In the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan is in line with their expectations.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 3 warning signs for Starpharma Holdings (of which 1 is potentially serious!) that you should know about in order to have a holistic understanding of the stock.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
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