Should You Worry About Northbridge Industrial Services plc’s (LON:NBI) CEO Pay Cheque?

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Eric Hook became the CEO of Northbridge Industrial Services plc (LON:NBI) in 1970. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Northbridge Industrial Services

How Does Eric Hook’s Compensation Compare With Similar Sized Companies?

Our data indicates that Northbridge Industrial Services plc is worth UK£47m, and total annual CEO compensation is UK£244k. (This figure is for the year to December 2018). That’s a fairly small increase of 0.4% on year before. Notably, the salary of UK£241k is the vast majority of the CEO compensation. We took a group of companies with market capitalizations below UK£158m, and calculated the median CEO total compensation to be UK£249k.

So Eric Hook is paid around the average of the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.

The graphic below shows how CEO compensation at Northbridge Industrial Services has changed from year to year.

AIM:NBI CEO Compensation, June 5th 2019
AIM:NBI CEO Compensation, June 5th 2019

Is Northbridge Industrial Services plc Growing?

Northbridge Industrial Services plc has increased its earnings per share (EPS) by an average of 46% a year, over the last three years (using a line of best fit). Its revenue is up 4.9% over last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. It’s nice to see a little revenue growth, as this is consistent with healthy business conditions. You might want to check this free visual report on analyst forecasts for future earnings.

Has Northbridge Industrial Services plc Been A Good Investment?

Boasting a total shareholder return of 91% over three years, Northbridge Industrial Services plc has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary…

Eric Hook is paid around the same as most CEOs of similar size companies.

Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. So one could argue the CEO compensation is quite modest, if you consider company performance! Whatever your view on compensation, you might want to check if insiders are buying or selling Northbridge Industrial Services shares (free trial).

If you want to buy a stock that is better than Northbridge Industrial Services, 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.