Shareholders Will Likely Find REACT Group PLC's (LON:REAT) CEO Compensation Acceptable

Key Insights

• REACT Group will host its Annual General Meeting on 28th of March
• Total pay for CEO Shaun Doak includes UK£116.0k salary
• Total compensation is 49% below industry average
• REACT Group's EPS declined by 52% over the past three years while total shareholder loss over the past three years was 36%

Shareholders may be wondering what CEO Shaun Doak plans to do to improve the less than great performance at REACT Group PLC (LON:REAT) recently. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 28th of March. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. We think CEO compensation looks appropriate given the data we have put together.

View our latest analysis for REACT Group

Comparing REACT Group PLC's CEO Compensation With The Industry

According to our data, REACT Group PLC has a market capitalization of UK£14m, and paid its CEO total annual compensation worth UK£144k over the year to September 2023. Notably, that's an increase of 26% over the year before. We note that the salary portion, which stands at UK£116.0k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the British Commercial Services industry with market capitalizations below UK£158m, reported a median total CEO compensation of UK£282k. In other words, REACT Group pays its CEO lower than the industry median.

Component	2023	2022	Proportion (2023)
Salary	UK£116k	UK£87k	81%
Other	UK£28k	UK£27k	19%
Total Compensation	UK£144k	UK£114k	100%

Speaking on an industry level, nearly 64% of total compensation represents salary, while the remainder of 36% is other remuneration. It's interesting to note that REACT Group pays out a greater portion of remuneration through salary, compared to the industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

REACT Group PLC's Growth

REACT Group PLC has reduced its earnings per share by 52% a year over the last three years. Its revenue is up 43% over the last year.

The reduction in EPS, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. 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. 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 REACT Group PLC Been A Good Investment?

The return of -36% over three years would not have pleased REACT Group PLC shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

The fact that shareholders have earned a negative share price return is certainly disconcerting. The downward trend in share price performance may be attributable to the the fact that earnings growth has gone backwards. In the upcoming AGM, shareholders will get the opportunity to discuss these concerns with the board and assess if the board's plan is likely to improve company performance.

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 2 warning signs for REACT Group that investors should think about before committing capital to this stock.

Important note: REACT Group 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.