Is Zotefoams plc's (LON:ZTF) CEO Salary Justified?
David Stirling became the CEO of Zotefoams plc (LON:ZTF) in 2000. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. 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.
See our latest analysis for Zotefoams
How Does David Stirling's Compensation Compare With Similar Sized Companies?
According to our data, Zotefoams plc has a market capitalization of UK£191m, and paid its CEO total annual compensation worth UK£792k over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at UK£249k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. When we examined a selection of companies with market caps ranging from UK£78m to UK£311m, we found the median CEO total compensation was UK£457k.
It would therefore appear that Zotefoams plc pays David Stirling 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 get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at Zotefoams has changed over time.
Is Zotefoams plc Growing?
On average over the last three years, Zotefoams plc has grown earnings per share (EPS) by 15% each year (using a line of best fit). It achieved revenue growth of 15% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. It could be important to check this free visual depiction of what analysts expect for the future.
Has Zotefoams plc Been A Good Investment?
I think that the total shareholder return of 45%, over three years, would leave most Zotefoams plc shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary...
We examined the amount Zotefoams plc pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. In addition, shareholders have done well over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Zotefoams (free visualization of insider trades).
If you want to buy a stock that is better than Zotefoams, this free list of high return, low debt companies is a great place to look.
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.
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