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What Can We Make Of Oxford Metrics' (LON:OMG) CEO Compensation?

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Simply Wall St
·4 min read
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This article will reflect on the compensation paid to Nick Bolton who has served as CEO of Oxford Metrics plc (LON:OMG) since 2005. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Oxford Metrics.

View our latest analysis for Oxford Metrics

Comparing Oxford Metrics plc's CEO Compensation With the industry

At the time of writing, our data shows that Oxford Metrics plc has a market capitalization of UK£114m, and reported total annual CEO compensation of UK£395k for the year to September 2020. That's a notable increase of 30% on last year. Notably, the salary which is UK£297.0k, represents most of the total compensation being paid.

On comparing similar companies from the same industry with market caps ranging from UK£73m to UK£291m, we found that the median CEO total compensation was UK£395k. This suggests that Oxford Metrics remunerates its CEO largely in line with the industry average. Furthermore, Nick Bolton directly owns UK£2.2m worth of shares in the company, implying that they are deeply invested in the company's success.

Component

2020

2019

Proportion (2020)

Salary

UK£297k

UK£261k

75%

Other

UK£98k

UK£44k

25%

Total Compensation

UK£395k

UK£305k

100%

On an industry level, roughly 68% of total compensation represents salary and 32% is other remuneration. It's interesting to note that Oxford Metrics pays out a greater portion of remuneration through salary, compared to the industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

ceo-compensation
ceo-compensation

Oxford Metrics plc's Growth

Over the last three years, Oxford Metrics plc has shrunk its earnings per share by 21% per year. In the last year, its revenue is down 14%.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Oxford Metrics plc Been A Good Investment?

We think that the total shareholder return of 50%, over three years, would leave most Oxford Metrics plc shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

As previously discussed, Nick is compensated close to the median for companies of its size, and which belong to the same industry. This isn't great when you look at it against the backdrop of EPS growth, which has been negative for the past three years. On the flip side, shareholder returns have been strong over the same time, which is certainly a positive sign. We do not think CEO compensation is a problem, but shrinking EPS is undoubtedly an issue that will have to be addressed.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 3 warning signs for Oxford Metrics (of which 1 is a bit unpleasant!) that you should know about in order to have a holistic understanding of the stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.