We Discuss Why TI Fluid Systems plc's (LON:TIFS) CEO Compensation May Be Closely Reviewed

Key Insights

• TI Fluid Systems to hold its Annual General Meeting on 14th of May
• Total pay for CEO Hans Frans Dieltjens includes €868.0k salary
• The overall pay is 142% above the industry average
• TI Fluid Systems' three-year loss to shareholders was 51% while its EPS was down 17% over the past three years

Shareholders will probably not be too impressed with the underwhelming results at TI Fluid Systems plc (LON:TIFS) recently. At the upcoming AGM on 14th of May, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. We present the case why we think CEO compensation is out of sync with company performance.

Check out our latest analysis for TI Fluid Systems

How Does Total Compensation For Hans Frans Dieltjens Compare With Other Companies In The Industry?

According to our data, TI Fluid Systems plc has a market capitalization of UK£702m, and paid its CEO total annual compensation worth €3.4m over the year to December 2023. We note that's an increase of 33% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at €868k.

On examining similar-sized companies in the British Auto Components industry with market capitalizations between UK£320m and UK£1.3b, we discovered that the median CEO total compensation of that group was €1.4m. Accordingly, our analysis reveals that TI Fluid Systems plc pays Hans Frans Dieltjens north of the industry median. What's more, Hans Frans Dieltjens holds UK£2.2m worth of shares in the company in their own name.

Component	2023	2022	Proportion (2023)
Salary	€868k	€819k	25%
Other	€2.6m	€1.8m	75%
Total Compensation	€3.4m	€2.6m	100%

On an industry level, roughly 77% of total compensation represents salary and 23% is other remuneration. It's interesting to note that TI Fluid Systems allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

TI Fluid Systems plc's Growth

TI Fluid Systems plc has reduced its earnings per share by 17% a year over the last three years. In the last year, its revenue is up 7.6%.

The decline in EPS is a bit concerning. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has TI Fluid Systems plc Been A Good Investment?

The return of -51% over three years would not have pleased TI Fluid Systems plc shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 2 warning signs for TI Fluid Systems (1 makes us a bit uncomfortable!) that you should be aware of before investing here.

Important note: TI Fluid Systems is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.