Key Things To Understand About Pennant International Group's (LON:PEN) CEO Pay Cheque

This article will reflect on the compensation paid to Phil Walker who has served as CEO of Pennant International Group plc (LON:PEN) since 2017. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

View our latest analysis for Pennant International Group

Comparing Pennant International Group plc's CEO Compensation With the industry

According to our data, Pennant International Group plc has a market capitalization of UK£14m, and paid its CEO total annual compensation worth UK£235k over the year to December 2019. That's a notable increase of 13% on last year. Notably, the salary which is UK£183.7k, represents most of the total compensation being paid.

On comparing similar-sized companies in the industry with market capitalizations below UK£150m, we found that the median total CEO compensation was UK£197k. This suggests that Pennant International Group remunerates its CEO largely in line with the industry average.

On an industry level, roughly 42% of total compensation represents salary and 58% is other remuneration. It's interesting to note that Pennant International Group pays out a greater portion of remuneration through salary, compared to the industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Pennant International Group plc's Growth Numbers

Over the last three years, Pennant International Group plc has shrunk its earnings per share by 91% per year. In the last year, its revenue is up 29%.

The reduction in EPS, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Pennant International Group plc Been A Good Investment?

With a three year total loss of 56% for the shareholders, Pennant International Group plc would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As previously discussed, Phil is compensated close to the median for companies of its size, and which belong to the same industry. But revenue growth seems to be inching northward, a heartening sign for the company. Contrarily, shareholder returns are in the red over the same stretch. EPS growth is also negative, adding insult to injury. It's tough for us to say Phil is overpaid but a mixed bag in terms of performance will surely irk shareholders and reduce chances of a raise.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 2 warning signs for Pennant International Group (1 shouldn't be ignored!) that you should be aware of before investing here.

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

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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. 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.
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