Is Quartix Holdings plc’s (LON:QTX) CEO Pay Justified?

Andy Walters is the CEO of Quartix Holdings plc (LON:QTX). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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 method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Quartix Holdings

How Does Andy Walters’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Quartix Holdings plc has a market cap of UK£117m, and is paying total annual CEO compensation of UK£87k. (This is based on the year to December 2018). That’s a fairly small increase of 2.5% on year before. It is worth noting that the CEO compensation consists almost entirely of the salary, worth UK£87k. We examined companies with market caps from UK£76m to UK£303m, and discovered that the median CEO total compensation of that group was UK£524k.

A first glance this seems like a real positive for shareholders, since Andy Walters is paid less than the average total compensation paid by similar sized companies. While this is a good thing, you’ll need to understand the business better before you can form an opinion.

You can see a visual representation of the CEO compensation at Quartix Holdings, below.

AIM:QTX CEO Compensation, March 25th 2019
AIM:QTX CEO Compensation, March 25th 2019

Is Quartix Holdings plc Growing?

On average over the last three years, Quartix Holdings plc has grown earnings per share (EPS) by 5.8% each year (using a line of best fit). It achieved revenue growth of 4.9% over the last year.

I’d prefer higher revenue growth, but I’m happy with the modest EPS growth. Considering these factors I’d say performance has been pretty decent, though not amazing. You might want to check this free visual report on analyst forecasts for future earnings.

Has Quartix Holdings plc Been A Good Investment?

With a three year total loss of 33%, Quartix Holdings plc would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

Quartix Holdings plc is currently paying its CEO below what is normal for companies of its size.

It’s well worth noting that while Andy Walters is paid less than most company leaders (at similar sized companies), performance has been somewhat uninspiring, and total returns have been lacking. So while shareholders shouldn’t be overly concerned about CEO compensation, they would probably like to see improved shareholder returns before seeing a pay increase. So you may want to check if insiders are buying Quartix Holdings shares with their own money (free access).

If you want to buy a stock that is better than Quartix Holdings, this free list of high return, low debt companies is a great place to look.

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.