A Look At Marlowe's (LON:MRL) CEO Remuneration

Alex Dacre is the CEO of Marlowe plc (LON:MRL), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. 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 Marlowe

Comparing Marlowe plc's CEO Compensation With the industry

Our data indicates that Marlowe plc has a market capitalization of UK£347m, and total annual CEO compensation was reported as UK£401k for the year to March 2020. Notably, that's an increase of 35% over the year before. In particular, the salary of UK£225.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between UK£148m and UK£590m had a median total CEO compensation of UK£539k. From this we gather that Alex Dacre is paid around the median for CEOs in the industry. Furthermore, Alex Dacre directly owns UK£20m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, roughly 56% of total compensation represents salary and 44% is other remuneration. Marlowe is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Marlowe plc's Growth

Marlowe plc has reduced its earnings per share by 32% a year over the last three years. It achieved revenue growth of 14% over the last year.

The decline in EPS is a bit concerning. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that EPS has gone backwards over three years. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Marlowe plc Been A Good Investment?

We think that the total shareholder return of 50%, over three years, would leave most Marlowe plc shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

As we touched on above, Marlowe plc is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. This isn't great when you look at it against the backdrop of EPS growth, which has been negative for the past three years. But on the bright side, shareholder returns have moved northward during the same period. We do not think CEO compensation is a problem, but shareholders might think performance needs to be improved before paying any more.

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. That's why we did some digging and identified 3 warning signs for Marlowe that investors should think about before committing capital to this stock.

Switching gears from Marlowe, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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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