Here's Why Shareholders Should Examine RA International Group plc's (LON:RAI) CEO Compensation Package More Closely

Key Insights

• RA International Group will host its Annual General Meeting on 26th of June
• Salary of US$430.0k is part of CEO Soraya Narfeldt's total remuneration
• The total compensation is similar to the average for the industry
• RA International Group's three-year loss to shareholders was 85% while its EPS was down 69% over the past three years

RA International Group plc (LON:RAI) has not performed well recently and CEO Soraya Narfeldt will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 26th of June. 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. From our analysis, we think CEO compensation may need a review in light of the recent performance.

See our latest analysis for RA International Group

How Does Total Compensation For Soraya Narfeldt Compare With Other Companies In The Industry?

At the time of writing, our data shows that RA International Group plc has a market capitalization of UK£13m, and reported total annual CEO compensation of US$487k for the year to December 2023. That's just a smallish increase of 7.7% on last year. Notably, the salary which is US$430.0k, represents most of the total compensation being paid.

On comparing similar-sized companies in the British Construction industry with market capitalizations below UK£157m, we found that the median total CEO compensation was US$535k. From this we gather that Soraya Narfeldt is paid around the median for CEOs in the industry. Moreover, Soraya Narfeldt also holds UK£7.4m worth of RA International Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	US$430k	US$411k	88%
Other	US$57k	US$41k	12%
Total Compensation	US$487k	US$452k	100%

Talking in terms of the industry, salary represented approximately 35% of total compensation out of all the companies we analyzed, while other remuneration made up 65% of the pie. According to our research, RA International Group has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at RA International Group plc's Growth Numbers

RA International Group plc has reduced its earnings per share by 69% a year over the last three years. Its revenue is down 7.4% over the previous year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has RA International Group plc Been A Good Investment?

With a total shareholder return of -85% over three years, RA International Group plc shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a 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.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 2 warning signs for RA International Group that investors should be aware of in a dynamic business environment.

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. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com