Alex Martin became the CEO of Realm Therapeutics Plc (LON:RLM) in 2015. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. 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 Alex Martin’s Compensation Compare With Similar Sized Companies?
Our data indicates that Realm Therapeutics Plc is worth UK£8.5m, and total annual CEO compensation is US$406k. (This number is for the twelve months until 2015). We think total compensation is more important but we note that the CEO salary is lower, at US$221k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO compensation was US$311k.
Thus we can conclude that Alex Martin receives more in total compensation than the median of a group of companies in the same market, and of similar size to Realm Therapeutics Plc. However, this doesn’t necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at Realm Therapeutics has changed from year to year.
Is Realm Therapeutics Plc Growing?
Realm Therapeutics Plc has reduced its earnings per share by an average of 19% a year, over the last three years. In the last year, its revenue is down -55%.
Few shareholders would be pleased to read that earnings per share are lower over three years. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO.
We don’t have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Realm Therapeutics Plc Been A Good Investment?
With a three year total loss of 68%, Realm Therapeutics Plc would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
We examined the amount Realm Therapeutics Plc pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.
Just as bad, share price gains for investors have failed to materialize, over the same period. In our opinion the CEO might be paid too generously! So you may want to check if insiders are buying Realm Therapeutics shares with their own money (free access).
Of course, the past can be informative so you might be interested in considering this analytical visualization showing the company history of earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.