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Should You Worry About ITM Power Plc's (LON:ITM) CEO Pay Cheque?

Simply Wall St

Graham Cooley has been the CEO of ITM Power Plc (LON:ITM) since 2009. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. 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.

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View our latest analysis for ITM Power

How Does Graham Cooley's Compensation Compare With Similar Sized Companies?

According to our data, ITM Power Plc has a market capitalization of UK£110m, and pays its CEO total annual compensation worth UK£409k. (This number is for the twelve months until April 2018). We think total compensation is more important but we note that the CEO salary is lower, at UK£194k. We took a group of companies with market capitalizations below UK£158m, and calculated the median CEO total compensation to be UK£247k.

As you can see, Graham Cooley is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean ITM Power Plc is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see, below, how CEO compensation at ITM Power has changed over time.

AIM:ITM CEO Compensation, May 27th 2019

Is ITM Power Plc Growing?

ITM Power Plc saw earnings per share stay pretty flat over the last three years, albeit with a slight decrease, according to the line of best fit. In the last year, its revenue is down -27%.

Unfortunately there is a complete lack of earnings per share improvement, over three years. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Shareholders might be interested in this free visualization of analyst forecasts.

Has ITM Power Plc Been A Good Investment?

I think that the total shareholder return of 110%, over three years, would leave most ITM Power Plc shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

We compared total CEO remuneration at ITM Power 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.

We think many shareholders would be underwhelmed with the business growth over the last three years.

But clearly there are some positives, because investors have done well over the same time frame. Considering this, shareholders are probably not too worried about the CEO compensation. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at ITM Power.

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.