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Does IMImobile PLC's (LON:IMO) CEO Pay Reflect Performance?

·3 min read

Jay Patel became the CEO of IMImobile PLC (LON:IMO) in 2013. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for IMImobile

How Does Jay Patel's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that IMImobile PLC has a market cap of UK£254m, and reported total annual CEO compensation of UK£310k for the year to March 2019. Notably, the salary of UK£300k is the vast majority of the CEO compensation. We examined companies with market caps from UK£160m to UK£639m, and discovered that the median CEO total compensation of that group was UK£741k.

Most shareholders would consider it a positive that Jay Patel 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.

The graphic below shows how CEO compensation at IMImobile has changed from year to year.

AIM:IMO CEO Compensation, March 13th 2020
AIM:IMO CEO Compensation, March 13th 2020

Is IMImobile PLC Growing?

IMImobile PLC has reduced its earnings per share by an average of 100% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is up 26%.

Investors should note that, over three years, earnings per share are down. On the other hand, the strong revenue growth suggests the business is growing. These two metric are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. You might want to check this free visual report on analyst forecasts for future earnings.

Has IMImobile PLC Been A Good Investment?

I think that the total shareholder return of 93%, over three years, would leave most IMImobile PLC shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

It looks like IMImobile PLC pays its CEO less than similar sized companies.

It's well worth noting that while Jay Patel is paid below what is normal at companies of similar size, the returns have been very pleasing, over the last three years. So, while it might be nice to have better EPS growth, on our analysis the CEO compensation is quite modest. On another note, IMImobile has 2 warning signs (and 1 which is potentially serious) we think you should know about.

Important note: IMImobile 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.

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. Thank you for reading.