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Is Gresham Technologies plc's (LON:GHT) CEO Pay Justified?

Simply Wall St

In 2015 Ian Manocha was appointed CEO of Gresham Technologies plc (LON:GHT). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. 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.

See our latest analysis for Gresham Technologies

How Does Ian Manocha's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Gresham Technologies plc has a market cap of UK£61m, and is paying total annual CEO compensation of UK£349k. (This figure is for the year to December 2018). That's actually a decrease on the year before. While we always look at total compensation first, we note that the salary component is less, at UK£260k. We looked at a group of companies with market capitalizations under UK£153m, and the median CEO total compensation was UK£238k.

As you can see, Ian Manocha is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Gresham Technologies plc is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see, below, how CEO compensation at Gresham Technologies has changed over time.

LSE:GHT CEO Compensation, April 15th 2019

Is Gresham Technologies plc Growing?

On average over the last three years, Gresham Technologies plc has shrunk earnings per share by 22% each year (measured with a line of best fit). In the last year, its revenue is down -7.3%.

Sadly for shareholders, earnings per share are actually down, over three years. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.

Has Gresham Technologies plc Been A Good Investment?

Given the total loss of 13% over three years, many shareholders in Gresham Technologies plc are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

We compared total CEO remuneration at Gresham Technologies plc with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.

We think many shareholders would be underwhelmed with the business growth over the last three years.

Arguably worse, investors are without a positive return for the last three years. In our opinion the CEO might be paid too generously! So you may want to check if insiders are buying Gresham Technologies shares with their own money (free access).

Important note: Gresham Technologies 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.

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.