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Karim Bitar has been the CEO of Genus plc (LON:GNS) since 2011. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. 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.
How Does Karim Bitar's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Genus plc has a market cap of UK£1.6b, and is paying total annual CEO compensation of UK£2.5m. (This number is for the twelve months until June 2018). While we always look at total compensation first, we note that the salary component is less, at UK£555k. We examined companies with market caps from UK£823m to UK£2.6b, and discovered that the median CEO total compensation of that group was UK£1.4m.
Thus we can conclude that Karim Bitar receives more in total compensation than the median of a group of companies in the same market, and of similar size to Genus 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 Genus has changed over time.
Is Genus plc Growing?
Genus plc has reduced its earnings per share by an average of 16% a year, over the last three years (measured with a line of best fit). It saw its revenue drop -1.1% over the last year.
Sadly for shareholders, earnings per share are actually down, over three years. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has Genus plc Been A Good Investment?
Most shareholders would probably be pleased with Genus plc for providing a total return of 36% over three years. 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.
We examined the amount Genus plc pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.
But clearly there are some positives, because investors have done well over the same time frame. So on this analysis we'd stop short of criticizing the level of CEO compensation. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Genus.
Important note: Genus may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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 email@example.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.