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Nigel Redwood became the CEO of Nasstar plc (LON:NASA) in 2014. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Nigel Redwood's Compensation Compare With Similar Sized Companies?
Our data indicates that Nasstar plc is worth UK£65m, and total annual CEO compensation is UK£326k. (This number is for the twelve months until December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at UK£177k. We looked at a group of companies with market capitalizations under UK£160m, and the median CEO total compensation was UK£254k.
So Nigel Redwood is paid around the average of the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
The graphic below shows how CEO compensation at Nasstar has changed from year to year.
Is Nasstar plc Growing?
On average over the last three years, Nasstar plc has shrunk earnings per share by 6.8% each year (measured with a line of best fit). In the last year, its revenue is up 6.6%.
Unfortunately, earnings per share have trended lower over the last three years. The fairly low revenue growth fails to impress given that the earnings per share is down. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.
Has Nasstar plc Been A Good Investment?
Nasstar plc has served shareholders reasonably well, with a total return of 33% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
Nigel Redwood is paid around what is normal the leaders of comparable size companies.
We're not seeing great strides in earnings per share, and total returns were decent but not amazing in the last three years. We're not saying the CEO pay is too generous, but we'd venture the company should look to improve its business metrics (and share price) before paying any more. So you may want to check if insiders are buying Nasstar shares with their own money (free access).
Important note: Nasstar 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.