Richard Tyson has been the CEO of TT Electronics plc (LON:TTG) since 2014. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. 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 Richard Tyson's Compensation Compare With Similar Sized Companies?
According to our data, TT Electronics plc has a market capitalization of UK£383m, and paid its CEO total annual compensation worth UK£2.2m over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at UK£455k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. When we examined a selection of companies with market caps ranging from UK£152m to UK£608m, we found the median CEO total compensation was UK£702k.
As you can see, Richard Tyson is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean TT Electronics plc is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
The graphic below shows how CEO compensation at TT Electronics has changed from year to year.
Is TT Electronics plc Growing?
Over the last three years TT Electronics plc has grown its earnings per share (EPS) by an average of 8.8% per year (using a line of best fit). In the last year, its revenue is up 26%.
It's great to see that revenue growth is strong. Combined with modest EPS growth, we get a good impression of the company. I'd stop short of saying the business performance is amazing, but there are enough positives to justify further research, or even adding the stock to your watch-list. It could be important to check this free visual depiction of what analysts expect for the future.
Has TT Electronics plc Been A Good Investment?
I think that the total shareholder return of 73%, over three years, would leave most TT Electronics plc shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
We compared total CEO remuneration at TT Electronics plc with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
One might like to have seen stronger growth, but shareholder returns have been pleasing, over the last three years. So, considering these tasty returns, the CEO compensation may be quite appropriate. So you may want to check if insiders are buying TT Electronics shares with their own money (free access).
Important note: TT Electronics may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.
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