How Should Investors Feel About Creo Medical Limited’s (LON:CREO) CEO Pay?

In 2012, Craig Gulliford was appointed CEO of Creo Medical Limited (LON:CREO). 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. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for Creo Medical

How Does Craig Gulliford’s Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Creo Medical Limited has a market cap of UK£211m, and reported total annual CEO compensation of UK£1.2m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at UK£792k. We examined companies with market caps from UK£81m to UK£325m, and discovered that the median CEO total compensation of that group was UK£612k.

Next, let’s break down remuneration compositions to understand how the industry and company compare with each other. On a sector level, around 66% of total compensation represents salary and 34% is other remuneration. Our data reveals that Creo Medical allocates salary in line with the wider market.

Thus we can conclude that Craig Gulliford receives more in total compensation than the median of a group of companies in the same market, and of similar size to Creo Medical Limited. However, this doesn’t necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous. The graphic below shows how CEO compensation at Creo Medical has changed from year to year.

AIM:CREO CEO Compensation May 9th 2020
AIM:CREO CEO Compensation May 9th 2020

Is Creo Medical Limited Growing?

On average over the last three years, Creo Medical Limited has seen earnings per share (EPS) move in a favourable direction by 6.2% each year (using a line of best fit). Its revenue is down 95% over last year.

I would prefer it if there was revenue growth, but the improvement in EPS is good. It’s hard to reach a conclusion about business performance right now. This may be one to watch. Shareholders might be interested in this free visualization of analyst forecasts.

Has Creo Medical Limited Been A Good Investment?

I think that the total shareholder return of 50%, over three years, would leave most Creo Medical Limited 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 Creo Medical Limited with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.

One might like to have seen stronger growth, but shareholder returns have been pleasing, over the last three years. As a result of the juicy return to investors, the CEO remuneration may well be quite reasonable. Shifting gears from CEO pay for a second, we’ve spotted 6 warning signs for Creo Medical you should be aware of, and 2 of them are potentially serious.

If you want to buy a stock that is better than Creo Medical, 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.

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. Thank you for reading.