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Does Tekcapital plc's (LON:TEK) CEO Pay Reflect Performance?

Simply Wall St

Cliff Gross is the CEO of Tekcapital plc (LON:TEK). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Tekcapital

How Does Cliff Gross's Compensation Compare With Similar Sized Companies?

Our data indicates that Tekcapital plc is worth UK£3.7m, and total annual CEO compensation was reported as US$207k for the year to November 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$192k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$327k.

Most shareholders would consider it a positive that Cliff Gross takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.

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

AIM:TEK CEO Compensation, January 15th 2020

Is Tekcapital plc Growing?

Tekcapital plc has increased its earnings per share (EPS) by an average of 96% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 138%.

This demonstrates that the company has been improving recently. A good result. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Although we don't have analyst forecasts you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Tekcapital plc Been A Good Investment?

With a three year total loss of 84%, Tekcapital plc would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

It appears that Tekcapital plc remunerates its CEO below most similar sized companies.

Many would consider this to indicate that the pay is modest since the business is growing. Few would deny that the total shareholder return over the last three years could have been a lot better. So while we don't think, Cliff Gross is paid too much, shareholders may hope that business performance translates to investment returns before pay rises are given out. When I see fairly low remuneration, combined with earnings per share growth, but without big share price gains, it makes me want to research the potential for future gains. Whatever your view on compensation, you might want to check if insiders are buying or selling Tekcapital shares (free trial).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.