Does IG Design Group plc's (LON:IGR) CEO Pay Matter?
Paul Fineman has been the CEO of IG Design Group plc (LON:IGR) since 2009. 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.
See our latest analysis for IG Design Group
How Does Paul Fineman's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that IG Design Group plc has a market cap of UK£511m, and reported total annual CEO compensation of UK£753k for the year to March 2019. While we always look at total compensation first, we note that the salary component is less, at UK£448k. We examined companies with market caps from UK£319m to UK£1.3b, and discovered that the median CEO total compensation of that group was UK£975k.
Next, let's break down remuneration compositions to understand how the industry and company compare with each other. On a sector level, around 44% of total compensation represents salary and 56% is other remuneration. According to our research, IG Design Group has allocated a higher percentage of pay to salary in comparison to the broader sector.
So Paul Fineman receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance. You can see, below, how CEO compensation at IG Design Group has changed over time.
Is IG Design Group plc Growing?
IG Design Group plc has seen earnings per share (EPS) move positively by an average of 7.7% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 34%.
I like the look of the strong year-on-year improvement in revenue. And in that context, the modest EPS improvement certainly isn't shabby. I wouldn't say this is necessarily top notch growth, but it is certainly promising. Shareholders might be interested in this free visualization of analyst forecasts.
Has IG Design Group plc Been A Good Investment?
Boasting a total shareholder return of 59% over three years, IG Design Group plc has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
Remuneration for Paul Fineman 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. Shifting gears from CEO pay for a second, we've spotted 5 warning signs for IG Design Group you should be aware of, and 1 of them is a bit concerning.
Important note: IG Design 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.
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.
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