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Is Genetic Signatures Limited's (ASX:GSS) CEO Paid At A Competitive Rate?

John Melki has been the CEO of Genetic Signatures Limited (ASX:GSS) since 2011. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for Genetic Signatures

How Does John Melki's Compensation Compare With Similar Sized Companies?

Our data indicates that Genetic Signatures Limited is worth AU$165m, and total annual CEO compensation was reported as AU$390k for the year to June 2019. We think total compensation is more important but we note that the CEO salary is lower, at AU$292k. We took a group of companies with market capitalizations below AU$300m, and calculated the median CEO total compensation to be AU$379k.

So John Melki receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

The graphic below shows how CEO compensation at Genetic Signatures has changed from year to year.

ASX:GSS CEO Compensation, February 21st 2020
ASX:GSS CEO Compensation, February 21st 2020

Is Genetic Signatures Limited Growing?

On average over the last three years, Genetic Signatures Limited has grown earnings per share (EPS) by 4.9% each year (using a line of best fit). It achieved revenue growth of 41% over the last year.

It's great to see that revenue growth is strong. And in that context, the modest EPS improvement certainly isn't shabby. So while I'd stop short of saying growth is absolutely outstanding, there are definitely some clear positives! Shareholders might be interested in this free visualization of analyst forecasts.

Has Genetic Signatures Limited Been A Good Investment?

Boasting a total shareholder return of 186% over three years, Genetic Signatures Limited has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Remuneration for John Melki is close enough to the median pay for a CEO of a similar sized company .

While we would like to see improved growth metrics, there is no doubt that the total returns have been great, over the last three years. So we can conclude that on this analysis the CEO compensation seems pretty sound. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Genetic Signatures.

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.

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.

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. Thank you for reading.