How Should Investors React To Egdon Resources plc’s (LON:EDR) CEO Pay?

Mark Anthony Abbott is the CEO of Egdon Resources plc (LON:EDR). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Egdon Resources

How Does Mark Anthony Abbott’s Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Egdon Resources plc has a market cap of UK£12m, and reported total annual CEO compensation of UK£206k for the year to July 2019. We think total compensation is more important but we note that the CEO salary is lower, at UK£178k. We looked at a group of companies with market capitalizations under UK£155m, and the median CEO total compensation was UK£250k.

So Mark Anthony Abbott is paid around the average of the companies we looked at. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.

You can see a visual representation of the CEO compensation at Egdon Resources, below.

AIM:EDR CEO Compensation, February 25th 2020
AIM:EDR CEO Compensation, February 25th 2020

Is Egdon Resources plc Growing?

Over the last three years Egdon Resources plc has grown its earnings per share (EPS) by an average of 11% per year (using a line of best fit). It achieved revenue growth of 81% over the last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. You might want to check this free visual report on analyst forecasts for future earnings.

Has Egdon Resources plc Been A Good Investment?

Given the total loss of 62% over three years, many shareholders in Egdon Resources plc are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

Mark Anthony Abbott is paid around what is normal the leaders of comparable size companies.

We’d say the company can boast of its EPS growth, but we find the returns over the last three years to be lacking. We’d be surprised if shareholders want to see a pay rise for the CEO, but we’d stop short of calling their pay too generous. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Egdon Resources (free visualization of insider trades).

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

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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