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What Can We Learn About IXICO's (LON:IXI) CEO Compensation?

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·3 min read
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This article will reflect on the compensation paid to Giulio Cerroni who has served as CEO of IXICO plc (LON:IXI) since 2017. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for IXICO.

See our latest analysis for IXICO

Comparing IXICO plc's CEO Compensation With the industry

Our data indicates that IXICO plc has a market capitalization of UK£43m, and total annual CEO compensation was reported as UK£538k for the year to September 2020. That's mostly flat as compared to the prior year's compensation. We note that the salary portion, which stands at UK£279.2k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below UK£144m, reported a median total CEO compensation of UK£162k. This suggests that Giulio Cerroni is paid more than the median for the industry. Furthermore, Giulio Cerroni directly owns UK£99k worth of shares in the company.

Component

2020

2019

Proportion (2020)

Salary

UK£279k

UK£216k

52%

Other

UK£258k

UK£330k

48%

Total Compensation

UK£538k

UK£546k

100%

On an industry level, roughly 46% of total compensation represents salary and 54% is other remuneration. IXICO pays out 52% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

ceo-compensation
ceo-compensation

IXICO plc's Growth

IXICO plc has seen its earnings per share (EPS) increase by 122% a year over the past three years. Its revenue is up 26% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has IXICO plc Been A Good Investment?

We think that the total shareholder return of 147%, over three years, would leave most IXICO plc shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

As previously discussed, Giulio is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, IXICO has produced strong EPS growth and shareholder returns over the last three years. Considering such exceptional results for the company, we'd venture to say CEO compensation is fair. The pleasing shareholder returns are the cherry on top. We wouldn't be wrong in saying that shareholders feel that Giulio's performance creates value for the company.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for IXICO that you should be aware of before investing.

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

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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.