In 2016, Phil Bentley was appointed CEO of Mitie Group plc (LON:MTO). 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. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Phil Bentley’s Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Mitie Group plc has a market cap of UK£264m, and reported total annual CEO compensation of UK£2.2m for the year to March 2019. While we always look at total compensation first, we note that the salary component is less, at UK£900k. We looked at a group of companies with market capitalizations from UK£160m to UK£638m, and the median CEO total compensation was UK£739k.
Now let’s take a look at the pay mix on an industry and company level to gain a better understanding of where Mitie Group stands. On an industry level, roughly 55% of total compensation represents salary and 45% is other remuneration. Mitie Group does not set aside a larger portion of remuneration in the form of salary, maintaining the same rate as the wider market.
It would therefore appear that Mitie Group plc pays Phil Bentley 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 a visual representation of the CEO compensation at Mitie Group, below.
Is Mitie Group plc Growing?
Over the last three years Mitie Group plc has seen earnings per share (EPS) move in a positive direction by an average of 52% per year (using a line of best fit). Its revenue is up 16% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. You might want to check this free visual report on analyst forecasts for future earnings.
Has Mitie Group plc Been A Good Investment?
Given the total loss of 69% over three years, many shareholders in Mitie Group plc are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
We compared the total CEO remuneration paid by Mitie Group plc, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
However, the earnings per share growth over three years is certainly impressive. However, the returns to investors are far less impressive, over the same period. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. CEO compensation is an important area to keep your eyes on, but we’ve also identified 3 warning signs for Mitie Group (2 can’t be ignored!) that you should be aware of before investing here.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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