Michael Edelman is the CEO of Nanoco Group plc (LON:NANO). 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. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Michael Edelman's Compensation Compare With Similar Sized Companies?
According to our data, Nanoco Group plc has a market capitalization of UK£52m, and paid its CEO total annual compensation worth UK£505k over the year to July 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at UK£322k. We took a group of companies with market capitalizations below UK£154m, and calculated the median CEO total compensation to be UK£251k.
As you can see, Michael Edelman is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Nanoco Group plc is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see a visual representation of the CEO compensation at Nanoco Group, below.
Is Nanoco Group plc Growing?
Nanoco Group plc has increased its earnings per share (EPS) by an average of 40% a year, over the last three years (using a line of best fit). Its revenue is up 115% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. You might want to check this free visual report on analyst forecasts for future earnings.
Has Nanoco Group plc Been A Good Investment?
Given the total loss of 56% over three years, many shareholders in Nanoco Group plc are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
We compared the total CEO remuneration paid by Nanoco Group plc, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
However we must not forget that the EPS growth has been very strong over three years. On the other hand returns to investors over the same period have probably disappointed many. Considering the per share profit growth, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. Whatever your view on compensation, you might want to check if insiders are buying or selling Nanoco Group shares (free trial).
If you want to buy a stock that is better than Nanoco Group, this free list of high return, low debt companies is a great place to look.
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