In 2007 Alan Foy was appointed CEO of Smart Metering Systems plc (LON:SMS). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Alan Foy's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Smart Metering Systems plc has a market cap of UK£613m, and reported total annual CEO compensation of UK£663k for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at UK£349k. We examined companies with market caps from UK£304m to UK£1.2b, and discovered that the median CEO total compensation of that group was UK£878k.
So Alan Foy receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
The graphic below shows how CEO compensation at Smart Metering Systems has changed from year to year.
Is Smart Metering Systems plc Growing?
Smart Metering Systems plc has reduced its earnings per share by an average of 53% a year, over the last three years (measured with a line of best fit). Its revenue is up 18% over last year.
Sadly for shareholders, earnings per share are actually down, over three years. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.
Has Smart Metering Systems plc Been A Good Investment?
With a total shareholder return of 5.0% over three years, Smart Metering Systems plc has done okay by shareholders. But they would probably prefer not to see CEO compensation far in excess of the median.
Remuneration for Alan Foy is close enough to the median pay for a CEO of a similar sized company .
The company isn't growing earnings per share, and nor have the total returns inspired us. We do not think the CEO pay is a problem, but one might argue that the company should improve returns to shareholders before increasing it. Shareholders may want to check for free if Smart Metering Systems insiders are buying or selling shares.
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.
If you spot an error that warrants correction, please contact the editor at email@example.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.