Is Creo Medical Limited’s (LON:CREO) CEO Salary Justified?

In 2012 Craig Gulliford was appointed CEO of Creo Medical Limited (LON:CREO). 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. 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 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£272m, 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 looked at a group of companies with market capitalizations from UK£152m to UK£609m, and the median CEO total compensation was UK£674k.

As you can see, Craig Gulliford is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Creo Medical Limited is paying too much. 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 Creo Medical has changed over time.

AIM:CREO CEO Compensation, December 31st 2019
AIM:CREO CEO Compensation, December 31st 2019

Is Creo Medical Limited Growing?

Over the last three years Creo Medical Limited has grown its earnings per share (EPS) by an average of 6.2% per year (using a line of best fit). Its revenue is down 95% over last year.

I generally like to see a little 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. It could be important to check this free visual depiction of what analysts expect for the future.

Has Creo Medical Limited Been A Good Investment?

I think that the total shareholder return of 122%, 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 examined the amount Creo Medical Limited pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

Over the last three years returns to investors have been great, though we might have liked stronger business growth. So, considering these tasty returns, the CEO compensation may be quite appropriate. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Creo Medical (free visualization of insider trades).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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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