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What We Learned About D4t4 Solutions' (LON:D4T4) CEO Pay

This article will reflect on the compensation paid to Pete Kear who has served as CEO of D4t4 Solutions Plc (LON:D4T4) since 2016. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for D4t4 Solutions

Comparing D4t4 Solutions Plc's CEO Compensation With the industry

According to our data, D4t4 Solutions Plc has a market capitalization of UK£81m, and paid its CEO total annual compensation worth UK£385k over the year to March 2020. This means that the compensation hasn't changed much from last year. Notably, the salary which is UK£210.0k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under UK£154m, the reported median total CEO compensation was UK£254k. This suggests that Pete Kear is paid more than the median for the industry. Moreover, Pete Kear also holds UK£3.4m worth of D4t4 Solutions stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component

2020

2019

Proportion (2020)

Salary

UK£210k

UK£177k

55%

Other

UK£175k

UK£213k

45%

Total Compensation

UK£385k

UK£390k

100%

On an industry level, roughly 65% of total compensation represents salary and 35% is other remuneration. D4t4 Solutions sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

ceo-compensation
ceo-compensation

D4t4 Solutions Plc's Growth

D4t4 Solutions Plc has seen its earnings per share (EPS) increase by 2.0% a year over the past three years. In the last year, its revenue is down 14%.

We would prefer it if there was revenue growth, but the modest improvement in EPS is good. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 D4t4 Solutions Plc Been A Good Investment?

Boasting a total shareholder return of 33% over three years, D4t4 Solutions Plc has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

As previously discussed, Pete is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. But shareholder returns have been positive for the last three years. Albeit, EPS growth has not been as impressive over the same time frame. We'd ideally want to see higher EPS growth, but CEO compensation seems to be within reason, given high shareholder returns.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 1 warning sign for D4t4 Solutions that investors should be aware of in a dynamic business environment.

Important note: D4t4 Solutions is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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@simplywallst.com.

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