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In 2005 Alastair Smith was appointed CEO of Avacta Group Plc (LON:AVCT). First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Alastair Smith's Compensation Compare With Similar Sized Companies?
Our data indicates that Avacta Group Plc is worth UK£34m, and total annual CEO compensation is UK£208k. (This is based on the year to July 2018). We think total compensation is more important but we note that the CEO salary is lower, at UK£193k. We looked at a group of companies with market capitalizations under UK£158m, and the median CEO total compensation was UK£251k.
So Alastair Smith is paid around the average of 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 Avacta Group has changed from year to year.
Is Avacta Group Plc Growing?
On average over the last three years, Avacta Group Plc has shrunk earnings per share by 18% each year (measured with a line of best fit). Its revenue is down -23% over last year.
Unfortunately, earnings per share have trended lower over the last three years. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.
Has Avacta Group Plc Been A Good Investment?
With a three year total loss of 71%, Avacta Group Plc would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
Alastair Smith is paid around the same as most CEOs of similar size companies.
Returns have been disappointing and the company is not growing its earnings per share. Suffice it to say, we don't think the CEO is underpaid! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Avacta Group (free visualization of insider trades).
Important note: Avacta Group may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE 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 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.