The CEO of Nanoco Group plc (LON:NANO) is Michael Edelman. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. 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.
How Does Michael Edelman's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Nanoco Group plc has a market cap of UK£39m, and is paying total annual CEO compensation of UK£312k. (This figure is for the year to July 2018). Notably, the salary of UK£297k is the vast majority of the CEO compensation. We examined a group of similar sized companies, with market capitalizations of below UK£164m. The median CEO total compensation in that group is UK£251k.
That means Michael Edelman receives fairly typical remuneration for the CEO of a company that size. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
You can see a visual representation of the CEO compensation at Nanoco Group, below.
Is Nanoco Group plc Growing?
Nanoco Group plc has increased its earnings per share (EPS) by an average of 32% a year, over the last three years (using a line of best fit). It achieved revenue growth of 646% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. It could be important to check this free visual depiction of what analysts expect for the future.
Has Nanoco Group plc Been A Good Investment?
With a three year total loss of 81%, Nanoco Group plc would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
Michael Edelman is paid around what is normal the leaders of comparable size companies.
We like that the company is growing EPS, but we cannot say the same about the lacklustre shareholder returns (over the last three years). Considering the improvement in earnings per share, one could argue that the CEO pay is appropriate, albeit not too low. So you may want to check if insiders are buying Nanoco Group shares with their own money (free access).
Important note: Nanoco 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.
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