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How Should Investors React To Scientific Digital Imaging plc's (LON:SDI) CEO Pay?

Simply Wall St

Mike Creedon became the CEO of Scientific Digital Imaging plc (LON:SDI) in 2012. 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 we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Scientific Digital Imaging

How Does Mike Creedon's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Scientific Digital Imaging plc has a market cap of UK£51m, and is paying total annual CEO compensation of UK£175k. (This number is for the twelve months until April 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at UK£128k. We looked at a group of companies with market capitalizations under UK£165m, and the median CEO total compensation was UK£253k.

A first glance this seems like a real positive for shareholders, since Mike Creedon is paid less than the average total compensation paid by similar sized companies. However, before we heap on the praise, we should delve deeper to understand business performance.

You can see a visual representation of the CEO compensation at Scientific Digital Imaging, below.

AIM:SDI CEO Compensation, September 4th 2019

Is Scientific Digital Imaging plc Growing?

Scientific Digital Imaging plc has increased its earnings per share (EPS) by an average of 19% a year, over the last three years (using a line of best fit). Its revenue is up 20% over last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Shareholders might be interested in this free visualization of analyst forecasts.

Has Scientific Digital Imaging plc Been A Good Investment?

Most shareholders would probably be pleased with Scientific Digital Imaging plc for providing a total return of 250% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

It appears that Scientific Digital Imaging plc remunerates its CEO below most similar sized companies. Many would consider this to indicate that the pay is modest since the business is growing. The strong history of shareholder returns might even have some thinking that Mike Creedon deserves a raise!

It is relatively rare to see a modestly paid CEO when performance is so impressive. But it is even better if company insiders are also buying shares with their own money. Shareholders may want to check for free if Scientific Digital Imaging insiders are buying or selling shares.

If you want to buy a stock that is better than Scientific Digital Imaging, this free list of high return, low debt companies is a great place to look.

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.