Is M.P. Evans Group plc's (LON:MPE) CEO Being Overpaid?
Tristan R. Price has been the CEO of M.P. Evans Group plc (LON:MPE) since 2016. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
Check out our latest analysis for M.P. Evans Group
How Does Tristan R. Price's Compensation Compare With Similar Sized Companies?
Our data indicates that M.P. Evans Group plc is worth UK£347m, and total annual CEO compensation was reported as US$919k for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$293k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. When we examined a selection of companies with market caps ranging from UK£157m to UK£628m, we found the median CEO total compensation was UK£683k.
Thus we can conclude that Tristan R. Price receives more in total compensation than the median of a group of companies in the same market, and of similar size to M.P. Evans Group plc. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at M.P. Evans Group has changed over time.
Is M.P. Evans Group plc Growing?
On average over the last three years, M.P. Evans Group plc has shrunk earnings per share by 19% each year (measured with a line of best fit). In the last year, its revenue is down 10%.
Sadly for shareholders, earnings per share are actually down, over three years. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.
Has M.P. Evans Group plc Been A Good Investment?
I think that the total shareholder return of 61%, over three years, would leave most M.P. Evans Group plc shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
We compared the total CEO remuneration paid by M.P. Evans Group plc, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
Neither earnings per share nor revenue have been growing sufficiently to impress us, over the last three years. However, we can't argue with the strong returns to shareholders, over the same time period. So on this analysis we'd stop short of criticizing the level of CEO compensation. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling M.P. Evans Group (free visualization of insider trades).
If you want to buy a stock that is better than M.P. Evans Group, this free list of high return, low debt companies is a great place to look.
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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.
