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How Is Telecom Plus' (LON:TEP) CEO Paid Relative To Peers?

Simply Wall St
·4 min read

Andrew Lindsay has been the CEO of Telecom Plus PLC (LON:TEP) since 2010, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Telecom Plus pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Telecom Plus

How Does Total Compensation For Andrew Lindsay Compare With Other Companies In The Industry?

According to our data, Telecom Plus PLC has a market capitalization of UK£1.0b, and paid its CEO total annual compensation worth UK£594k over the year to March 2020. This means that the compensation hasn't changed much from last year. We note that the salary portion, which stands at UK£566.0k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between UK£774m and UK£2.5b had a median total CEO compensation of UK£793k. From this we gather that Andrew Lindsay is paid around the median for CEOs in the industry. What's more, Andrew Lindsay holds UK£4.7m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component

2020

2019

Proportion (2020)

Salary

UK£566k

UK£555k

95%

Other

UK£28k

UK£26k

5%

Total Compensation

UK£594k

UK£581k

100%

Talking in terms of the industry, salary represented approximately 34% of total compensation out of all the companies we analyzed, while other remuneration made up 66% of the pie. Telecom Plus pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. 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

Telecom Plus PLC's Growth

Over the past three years, Telecom Plus PLC has seen its earnings per share (EPS) grow by 6.5% per year. Its revenue is up 8.8% over the last year.

We're not particularly impressed by the revenue growth, but the modest improvement in EPS is good. Considering these factors we'd say performance has been pretty decent, though not amazing. 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 Telecom Plus PLC Been A Good Investment?

With a total shareholder return of 22% over three years, Telecom Plus PLC shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

Andrew receives almost all of their compensation through a salary. As previously discussed, Andrew is compensated close to the median for companies of its size, and which belong to the same industry. On the other hand, EPS and shareholder returns have been stable over the last three years, but have not grown substantially. Considering the steady performance, it's tough to call out CEO compensation as too high, but shareholders might want to see more robust growth metrics before agreeing to a future raise.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 2 warning signs for Telecom Plus (of which 1 is significant!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Telecom Plus, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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@simplywallst.com.