Is SpaceandPeople plc’s (LON:SAL) CEO Overpaid Relative To Its Peers?

The CEO of SpaceandPeople plc (LON:SAL) is Matthew Bending. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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 method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for SpaceandPeople

How Does Matthew Bending’s Compensation Compare With Similar Sized Companies?

According to our data, SpaceandPeople plc has a market capitalization of UK£2.6m, and pays its CEO total annual compensation worth UK£162k. (This is based on the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at UK£149k. We examined a group of similar sized companies, with market capitalizations of below UK£162m. The median CEO total compensation in that group is UK£252k.

This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.

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

AIM:SAL CEO Compensation, September 6th 2019
AIM:SAL CEO Compensation, September 6th 2019

Is SpaceandPeople plc Growing?

On average over the last three years, SpaceandPeople plc has shrunk earnings per share by 38% each year (measured with a line of best fit). Its revenue is down -21% over last year.

Unfortunately, earnings per share have trended lower over the last three years. And the impression is worse when you consider revenue is down year-on-year. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration.

Has SpaceandPeople plc Been A Good Investment?

With a three year total loss of 60%, SpaceandPeople plc would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary…

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

The compensation paid to Matthew Bending is lower than is usual at similar sized companies, but the eps growth is lacking, just like the returns (over three years). While one could argue it is appropriate for the CEO to be paid less than other CEOs of similar sized companies, given company performance, we would not call the pay overly generous. So you may want to check if insiders are buying SpaceandPeople shares with their own money (free access).

Important note: SpaceandPeople 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.