What Did Frontier Developments plc's (LON:FDEV) CEO Take Home Last Year?
David Braben is the CEO of Frontier Developments plc (LON:FDEV). 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. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
See our latest analysis for Frontier Developments
How Does David Braben's Compensation Compare With Similar Sized Companies?
Our data indicates that Frontier Developments plc is worth UK£512m, and total annual CEO compensation was reported as UK£309k for the year to May 2019. We think total compensation is more important but we note that the CEO salary is lower, at UK£208k. We examined companies with market caps from UK£309m to UK£1.2b, and discovered that the median CEO total compensation of that group was UK£914k.
Most shareholders would consider it a positive that David Braben takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see, below, how CEO compensation at Frontier Developments has changed over time.
Is Frontier Developments plc Growing?
Over the last three years Frontier Developments plc has grown its earnings per share (EPS) by an average of 25% per year (using a line of best fit). In the last year, its revenue is down 29%.
This shows that the company has improved itself over the last few years. Good news for shareholders. Revenue growth is a real positive for growth, but ultimately profits are more important. It could be important to check this free visual depiction of what analysts expect for the future.
Has Frontier Developments plc Been A Good Investment?
I think that the total shareholder return of 369%, over three years, would leave most Frontier Developments plc shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
It looks like Frontier Developments plc pays its CEO less than similar sized companies.
Considering the underlying business is growing earnings, this would suggest the pay is modest. And given most shareholders are probably very happy with recent returns, you might even think that David Braben deserves a raise! Most shareholders like to see a modestly paid CEO combined with strong performance by the company. It would be even more positive if company insiders are buying shares. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Frontier Developments (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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