Phil Reason is the CEO of Instem plc (LON:INS). First, this article will compare CEO compensation with compensation at similar sized companies. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Phil Reason's Compensation Compare With Similar Sized Companies?
Our data indicates that Instem plc is worth UK£65m, and total annual CEO compensation is UK£243k. (This figure is for the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at UK£207k. We took a group of companies with market capitalizations below UK£165m, and calculated the median CEO total compensation to be UK£249k.
That means Phil Reason 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 Instem has changed from year to year.
Is Instem plc Growing?
Instem plc has increased its earnings per share (EPS) by an average of 86% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 7.8%.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Shareholders might be interested in this free visualization of analyst forecasts.
Has Instem plc Been A Good Investment?
I think that the total shareholder return of 69%, over three years, would leave most Instem plc shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Phil Reason is paid around what is normal the leaders of comparable size companies.
Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Instem.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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