Does Northbridge Industrial Services' (LON:NBI) CEO Salary Compare Well With The Performance Of The Company?
Eric Hook is the CEO of Northbridge Industrial Services plc (LON:NBI), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Northbridge Industrial Services.
Check out our latest analysis for Northbridge Industrial Services
How Does Total Compensation For Eric Hook Compare With Other Companies In The Industry?
According to our data, Northbridge Industrial Services plc has a market capitalization of UK£19m, and paid its CEO total annual compensation worth UK£331k over the year to December 2019. Notably, that's an increase of 36% over the year before. We note that the salary portion, which stands at UK£265.0k constitutes the majority of total compensation received by the CEO.
On comparing similar-sized companies in the industry with market capitalizations below UK£151m, we found that the median total CEO compensation was UK£321k. From this we gather that Eric Hook is paid around the median for CEOs in the industry. Moreover, Eric Hook also holds UK£492k worth of Northbridge Industrial Services stock directly under their own name.
Component | 2019 | 2018 | Proportion (2019) |
Salary | UK£265k | UK£241k | 80% |
Other | UK£66k | UK£3.0k | 20% |
Total Compensation | UK£331k | UK£244k | 100% |
Talking in terms of the industry, salary represented approximately 77% of total compensation out of all the companies we analyzed, while other remuneration made up 23% of the pie. There isn't a significant difference between Northbridge Industrial Services and the broader market, in terms of salary allocation in the overall compensation package. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at Northbridge Industrial Services plc's Growth Numbers
Northbridge Industrial Services plc's earnings per share (EPS) grew 24% per year over the last three years. In the last year, its revenue is up 5.6%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Northbridge Industrial Services plc Been A Good Investment?
With a three year total loss of 35% for the shareholders, Northbridge Industrial Services plc would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
As we noted earlier, Northbridge Industrial Services pays its CEO in line with similar-sized companies belonging to the same industry. On the other hand, the company has logged negative shareholder returns over the previous three years. But on the bright side, EPS growth is positive over the same period. Considering positive EPS growth, we'd say compensation is fair, but shareholders may be wary of a bump in pay before the company logs positive returns.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 2 warning signs for Northbridge Industrial Services that investors should be aware of in a dynamic business environment.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
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.
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