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Is Corero Network Security plc's (LON:CNS) CEO Paid At A Competitive Rate?

In 2013, Robert Stephenson was appointed CEO of Corero Network Security plc (LON:CNS). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for Corero Network Security

How Does Robert Stephenson's Compensation Compare With Similar Sized Companies?

Our data indicates that Corero Network Security plc is worth UK£23m, and total annual CEO compensation was reported as US$474k for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$270k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$337k.

Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of Corero Network Security. Talking in terms of the sector, salary represented approximately 68% of total compensation out of all the companies we analysed, while other remuneration made up 32% of the pie. Corero Network Security is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation

Thus we can conclude that Robert Stephenson receives more in total compensation than the median of a group of companies in the same market, and of similar size to Corero Network Security plc. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance. The graphic below shows how CEO compensation at Corero Network Security has changed from year to year.

AIM:CNS CEO Compensation May 24th 2020
AIM:CNS CEO Compensation May 24th 2020

Is Corero Network Security plc Growing?

Over the last three years Corero Network Security plc has seen earnings per share (EPS) move in a positive direction by an average of 71% per year (using a line of best fit). Its revenue is down 2.4% over last year.

This demonstrates that the company has been improving recently. A good result. While it would be good to see revenue growth, profits matter more in the end. It could be important to check this free visual depiction of what analysts expect for the future.

Has Corero Network Security plc Been A Good Investment?

Since shareholders would have lost about 45% over three years, some Corero Network Security plc shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We compared total CEO remuneration at Corero Network Security plc with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. However, the returns to investors are far less impressive, over the same period. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. Moving away from CEO compensation for the moment, we've identified 3 warning signs for Corero Network Security that you should be aware of before investing.

If you want to buy a stock that is better than Corero Network Security, this free list of high return, low debt companies is a great place to look.

Love or hate this article? Concerned about the content? Get in touch with us directly. Alternatively, email 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. 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. Thank you for reading.

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