It's Probably Less Likely That Verditek PLC's (LON:VDTK) CEO Will See A Huge Pay Rise This Year
Key Insights
Verditek to hold its Annual General Meeting on 21st of December
Salary of UK£152.0k is part of CEO Rob Richards's total remuneration
The total compensation is similar to the average for the industry
Verditek's three-year loss to shareholders was 97% while its EPS grew by 32% over the past three years
The underwhelming share price performance of Verditek PLC (LON:VDTK) in the past three years would have disappointed many shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 21st of December. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.
See our latest analysis for Verditek
Comparing Verditek PLC's CEO Compensation With The Industry
Our data indicates that Verditek PLC has a market capitalization of UK£1.1m, and total annual CEO compensation was reported as UK£237k for the year to December 2022. That's a notable increase of 28% on last year. We note that the salary portion, which stands at UK£152.0k constitutes the majority of total compensation received by the CEO.
For comparison, other companies in the British Commercial Services industry with market capitalizations below UK£157m, reported a median total CEO compensation of UK£288k. So it looks like Verditek compensates Rob Richards in line with the median for the industry.
Component | 2022 | 2021 | Proportion (2022) |
Salary | UK£152k | UK£151k | 64% |
Other | UK£85k | UK£34k | 36% |
Total Compensation | UK£237k | UK£185k | 100% |
Speaking on an industry level, nearly 64% of total compensation represents salary, while the remainder of 36% is other remuneration. Although there is a difference in how total compensation is set, Verditek more or less reflects the market in terms of setting the salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Verditek PLC's Growth
Verditek PLC has seen its earnings per share (EPS) increase by 32% a year over the past three years. In the last year, its revenue is up 173%.
This demonstrates that the company has been improving recently and is good news for the shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Verditek PLC Been A Good Investment?
Few Verditek PLC shareholders would feel satisfied with the return of -97% over three years. So shareholders would probably want the company to be less generous with CEO compensation.
To Conclude...
Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would be keen to know what's holding the stock back when earnings have grown. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 5 warning signs for Verditek (4 are a bit unpleasant!) that you should be aware of before investing here.
Important note: Verditek is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
