Is Mobile Tornado Group plc's (LON:MBT) CEO Pay Fair?
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In 2016 Avi Tooba was appointed CEO of Mobile Tornado Group plc (LON:MBT). First, this article will compare CEO compensation with compensation at similar sized companies. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for Mobile Tornado Group
How Does Avi Tooba's Compensation Compare With Similar Sized Companies?
Our data indicates that Mobile Tornado Group plc is worth UK£17m, and total annual CEO compensation is UK£151k. (This is based on the year to December 2017). We think total compensation is more important but we note that the CEO salary is lower, at UK£112k. We took a group of companies with market capitalizations below UK£153m, and calculated the median CEO total compensation to be UK£237k.
A first glance this seems like a real positive for shareholders, since Avi Tooba is paid less than the average total compensation paid by similar sized companies. While this is a good thing, you'll need to understand the business better before you can form an opinion.
The graphic below shows how CEO compensation at Mobile Tornado Group has changed from year to year.
Is Mobile Tornado Group plc Growing?
Over the last three years Mobile Tornado Group plc has grown its earnings per share (EPS) by an average of 24% per year (using a line of best fit). It achieved revenue growth of 18% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Mobile Tornado Group plc Been A Good Investment?
I think that the total shareholder return of 126%, over three years, would leave most Mobile Tornado 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...
It appears that Mobile Tornado Group plc remunerates its CEO below most similar sized companies. Considering the underlying business is growing earnings, this would suggest the pay is modest. The strong history of shareholder returns might even have some thinking that Avi Tooba deserves a raise!
It is relatively rare to see a modestly paid CEO when performance is so impressive. It would be even more positive if company insiders are buying shares. Whatever your view on compensation, you might want to check if insiders are buying or selling Mobile Tornado Group shares (free trial).
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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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.
