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Is Online Blockchain PLC's (LON:OBC) CEO Paid Enough Relative To Peers?

Simply Wall St

The CEO of Online Blockchain PLC (LON:OBC) is Clem Chambers. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for Online Blockchain

How Does Clem Chambers's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Online Blockchain PLC has a market cap of UK£1.5m, and reported total annual CEO compensation of UK£56k for the year to June 2018. While we always look at total compensation first, we note that the salary component is less, at UK£38k. We looked at a group of companies with market capitalizations under UK£154m, and the median CEO total compensation was UK£249k.

A first glance this seems like a real positive for shareholders, since Clem Chambers is paid less than the average total compensation paid by similar sized companies. However, before we heap on the praise, we should delve deeper to understand business performance.

The graphic below shows how CEO compensation at Online Blockchain has changed from year to year.

AIM:OBC CEO Compensation, December 4th 2019

Is Online Blockchain PLC Growing?

On average over the last three years, Online Blockchain PLC has shrunk earnings per share by 119% each year (measured with a line of best fit). It saw its revenue drop 11% over the last year.

Unfortunately, earnings per share have trended lower over the last three years. And the fact that revenue is down year on year arguably paints an ugly picture. 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 Online Blockchain PLC Been A Good Investment?

Online Blockchain PLC has generated a total shareholder return of 9.4% over three years, so most shareholders wouldn't be too disappointed. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

It appears that Online Blockchain PLC remunerates its CEO below most similar sized companies.

Shareholders should note that compensation for Clem Chambers is under the median of a group of similar sized companies. But the company lacks earnings per share growth, and returns to shareholders are less than stellar. So while shareholders shouldn't be overly concerned about CEO compensation, we suspect most would prefer see improved performance, before increasing pay. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Online Blockchain (free visualization of insider trades).

If you want to buy a stock that is better than Online Blockchain, this free list of high return, low debt companies is a great place to look.

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.

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. Thank you for reading.