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Is Safeland plc’s (LON:SAF) CEO Salary Justified?

Simply Wall St

Larry Lipman is the CEO of Safeland plc (LON:SAF). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Safeland

How Does Larry Lipman’s Compensation Compare With Similar Sized Companies?

According to our data, Safeland plc has a market capitalization of UK£6.3m, and pays its CEO total annual compensation worth UK£246k. (This figure is for the year to March 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at UK£204k. We looked at a group of companies with market capitalizations under UK£151m, and the median CEO total compensation was UK£236k.

That means Larry Lipman receives fairly typical remuneration for the CEO of a company that size. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.

You can see a visual representation of the CEO compensation at Safeland, below.

AIM:SAF CEO Compensation, March 19th 2019
AIM:SAF CEO Compensation, March 19th 2019

Is Safeland plc Growing?

On average over the last three years, Safeland plc has shrunk earnings per share by 38% each year (measured with a line of best fit). In the last year, its revenue is down -86%.

Unfortunately, earnings per share have trended lower over the last three years. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. Although we don’t have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Safeland plc Been A Good Investment?

Since shareholders would have lost about 22% over three years, some Safeland plc shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

Larry Lipman is paid around what is normal the leaders of comparable size companies.

Returns have been disappointing and the company is not growing its earnings per share. Most would consider it prudent for the company to hold off any CEO pay rise until performance improves. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Safeland (free visualization of insider trades).

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

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 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. Thank you for reading.