Yahoo News What We Learned About Living Cell Technologies' (ASX:LCT) CEO Pay
Ken Taylor has been the CEO of Living Cell Technologies Limited (ASX:LCT) since 2014, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Living Cell Technologies pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
See our latest analysis for Living Cell Technologies
How Does Total Compensation For Ken Taylor Compare With Other Companies In The Industry?
Our data indicates that Living Cell Technologies Limited has a market capitalization of AU$8.6m, and total annual CEO compensation was reported as AU$357k for the year to June 2020. We note that's a decrease of 8.4% compared to last year. It is worth noting that the CEO compensation consists entirely of the salary, worth AU$357k.
On comparing similar-sized companies in the industry with market capitalizations below AU$285m, we found that the median total CEO compensation was AU$450k. So it looks like Living Cell Technologies compensates Ken Taylor in line with the median for the industry.
Component | 2020 | 2019 | Proportion (2020) |
Salary | AU$357k | AU$381k | 100% |
Other | - | AU$9.2k | - |
Total Compensation | AU$357k | AU$390k | 100% |
On an industry level, around 65% of total compensation represents salary and 35% is other remuneration. On a company level, Living Cell Technologies prefers to reward its CEO through a salary, opting not to pay Ken Taylor through non-salary benefits. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
Living Cell Technologies Limited's Growth
Living Cell Technologies Limited has seen its earnings per share (EPS) increase by 35% a year over the past three years. Its revenue is down 28% over the previous year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Living Cell Technologies Limited Been A Good Investment?
With a three year total loss of 92% for the shareholders, Living Cell Technologies Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.
To Conclude...
Living Cell Technologies pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As we touched on above, Living Cell Technologies Limited is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. On the other hand, the company has logged negative shareholder returns over the previous three years. However, EPS growth is positive over the same time frame. It's tough for us to say CEO compensation is too generous when EPS growth is positive, but negative investor returns will irk shareholders and reduce any chances of a raise.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 4 warning signs for Living Cell Technologies (of which 3 make us uncomfortable!) that you should know about in order to have a holistic understanding of the stock.
Switching gears from Living Cell Technologies, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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. 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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