Is Aggregated Micro Power Holdings plc (LON:AMPH) Overpaying Its CEO?

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The CEO of Aggregated Micro Power Holdings plc (LON:AMPH) is Richard Burrell. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. 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.

See our latest analysis for Aggregated Micro Power Holdings

How Does Richard Burrell’s Compensation Compare With Similar Sized Companies?

According to our data, Aggregated Micro Power Holdings plc has a market capitalization of UK£43m, and pays its CEO total annual compensation worth UK£125k. (This figure is for the year to March 2018). While we always look at total compensation first, we note that the salary component is less, at UK£105k. We looked at a group of companies with market capitalizations under UK£161m, and the median CEO total compensation was UK£254k.

Most shareholders would consider it a positive that Richard Burrell takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it’s important we delve into the performance of the actual business.

The graphic below shows how CEO compensation at Aggregated Micro Power Holdings has changed from year to year.

AIM:AMPH CEO Compensation, July 19th 2019
AIM:AMPH CEO Compensation, July 19th 2019

Is Aggregated Micro Power Holdings plc Growing?

Over the last three years Aggregated Micro Power Holdings plc has grown its earnings per share (EPS) by an average of 120% per year (using a line of best fit). In the last year, its revenue is up 80%.

This demonstrates that the company has been improving recently. A good result. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business.

Has Aggregated Micro Power Holdings plc Been A Good Investment?

Aggregated Micro Power Holdings plc has not done too badly by shareholders, with a total return of 3.0%, over three years. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.

In Summary…

It appears that Aggregated Micro Power Holdings plc remunerates its CEO below most similar sized companies. Considering the underlying business is growing earnings, this would suggest the pay is modest. While some might be keen on seeing higher returns, our short analysis has not produced any evidence to suggest Richard Burrell is overcompensated.

It’s good to see reasonable payment of the CEO, even while the business improves. But for me, it’s even better if insiders are also buying shares with their own cold, hard, cash. Whatever your view on compensation, you might want to check if insiders are buying or selling Aggregated Micro Power Holdings shares (free trial).

Important note: Aggregated Micro Power Holdings may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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.