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Is First Derivatives plc’s (LON:FDP) CEO Paid Enough Relative To Peers?

Simply Wall St

The CEO of First Derivatives plc (LON:FDP) is Brian Conlon. 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 – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for First Derivatives

How Does Brian Conlon’s Compensation Compare With Similar Sized Companies?

Our data indicates that First Derivatives plc is worth UK£594m, and total annual CEO compensation is UK£693k. (This number is for the twelve months until February 2018). We think total compensation is more important but we note that the CEO salary is lower, at UK£330k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of UK£307m to UK£1.2b. The median total CEO compensation was UK£808k.

So Brian Conlon receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.

You can see a visual representation of the CEO compensation at First Derivatives, below.

AIM:FDP CEO Compensation, March 11th 2019

Is First Derivatives plc Growing?

Over the last three years First Derivatives plc has shrunk its earnings per share by an average of 11% per year (measured with a line of best fit). In the last year, its revenue is up 22%.

Few shareholders would be pleased to read that earnings per share are lower over three years. There’s no doubt that the silver lining is that revenue is up. But it isn’t sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.

Has First Derivatives plc Been A Good Investment?

I think that the total shareholder return of 54%, over three years, would leave most First Derivatives 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…

Brian Conlon is paid around what is normal the leaders of comparable size companies.

We’re not seeing great strides in earnings per share, but the company has clearly pleased some investors, given the returns over the last three years. So we think most shareholders wouldn’t be too worried about CEO compensation, which is close to the median for similar sized companies. Shareholders may want to check for free if First Derivatives insiders are buying or selling shares.

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

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.

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. Thank you for reading.