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The CEO of Grafenia Plc (LON:GRA) is Peter Gunning. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Peter Gunning's Compensation Compare With Similar Sized Companies?
According to our data, Grafenia Plc has a market capitalization of UK£11m, and paid its CEO total annual compensation worth UK£187k over the year to March 2019. We think total compensation is more important but we note that the CEO salary is lower, at UK£171k. We took a group of companies with market capitalizations below UK£155m, and calculated the median CEO total compensation to be UK£248k.
So Peter Gunning receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
The graphic below shows how CEO compensation at Grafenia has changed from year to year.
Is Grafenia Plc Growing?
Over the last three years Grafenia Plc has shrunk its earnings per share by an average of 71% per year (measured with a line of best fit). In the last year, its revenue is up 9.1%.
Few shareholders would be pleased to read that earnings per share are lower over three years. The fairly low revenue growth fails to impress given that the earnings per share is down. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Grafenia Plc Been A Good Investment?
Grafenia Plc has generated a total shareholder return of 5.7% over three years, so most shareholders wouldn't be too disappointed. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
Peter Gunning is paid around the same as most CEOs of similar size companies.
The company isn't growing earnings per share, and nor have the total returns inspired us. We do not think the CEO pay is a problem, but one might argue that the company should improve returns to shareholders before increasing it. Shareholders may want to check for free if Grafenia insiders are buying or selling shares.
Important note: Grafenia 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 firstname.lastname@example.org. 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.