Ian Manocha became the CEO of Gresham Technologies plc (LON:GHT) in 2015. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Ian Manocha's Compensation Compare With Similar Sized Companies?
Our data indicates that Gresham Technologies plc is worth UK£73m, and total annual CEO compensation was reported as UK£349k for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at UK£260k. We looked at a group of companies with market capitalizations under UK£155m, and the median CEO total compensation was UK£248k.
It would therefore appear that Gresham Technologies plc pays Ian Manocha more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at Gresham Technologies has changed over time.
Is Gresham Technologies plc Growing?
Gresham Technologies plc has reduced its earnings per share by an average of 69% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is up 13%.
Few shareholders would be pleased to read that earnings per share are lower over three years. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for me to put aside my concerns around earnings. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.
Has Gresham Technologies plc Been A Good Investment?
With a three year total loss of 4.5%, Gresham Technologies plc would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
We compared total CEO remuneration at Gresham Technologies plc with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
We think many shareholders would be underwhelmed with the business growth over the last three years. Over the same period, investors would have come away with nothing in the way of share price gains. In our opinion the CEO might be paid too generously! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Gresham Technologies (free visualization of insider trades).
Important note: Gresham Technologies 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.
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