Nik Philpot has been the CEO of Eckoh plc (LON:ECK) since 2006. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Nik Philpot's Compensation Compare With Similar Sized Companies?
Our data indicates that Eckoh plc is worth UK£125m, and total annual CEO compensation is UK£459k. (This is based on the year to March 2019). We note that's an increase of 47% above last year. While we always look at total compensation first, we note that the salary component is less, at UK£289k. We looked at a group of companies with market capitalizations from UK£80m to UK£320m, and the median CEO total compensation was UK£506k.
That means Nik Philpot receives fairly typical remuneration for the CEO of a company that size. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
The graphic below shows how CEO compensation at Eckoh has changed from year to year.
Is Eckoh plc Growing?
Over the last three years Eckoh plc has shrunk its earnings per share by an average of 15% per year (measured with a line of best fit). In the last year, its revenue is up 5.4%.
Sadly for shareholders, earnings per share are actually down, over three years. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has Eckoh plc Been A Good Investment?
Eckoh plc has not done too badly by shareholders, with a total return of 2.6%, over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
Nik Philpot is paid around the same as most CEOs of similar size companies.
We feel that earnings per share have been a bit disappointing, but and we don't think the total returns are amazing. This contrasts with the growth in CEO remuneration. We wouldn't say the CEO pay is too high, but one might argue that the company should improve returns to shareholders before increasing it. Whatever your view on compensation, you might want to check if insiders are buying or selling Eckoh shares (free trial).
Important note: Eckoh 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.
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