Should Shareholders Worry About REACT Group PLC's (LON:REAT) CEO Compensation Package?

Key Insights

• REACT Group will host its Annual General Meeting on 27th of March
• CEO Shaun Doak's total compensation includes salary of UK£149.0k
• The overall pay is 30% below the industry average
• Over the past three years, REACT Group's EPS fell by 73% and over the past three years, the total loss to shareholders 26%

Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit.

Performance at REACT Group PLC (LON:REAT) has not been particularly rosy recently and shareholders will likely be holding CEO Shaun Doak and the board accountable for this. The next AGM coming up on 27th of March will be a chance for shareholders to have their concerns addressed by the board, challenge management on company strategy and vote on resolutions such as executive remuneration, which may help change the company's future prospects. We think most shareholders will probably pass the CEO compensation, based on what we gathered.

View our latest analysis for REACT Group

How Does Total Compensation For Shaun Doak Compare With Other Companies In The Industry?

Our data indicates that REACT Group PLC has a market capitalization of UK£17m, and total annual CEO compensation was reported as UK£184k for the year to September 2024. Notably, that's an increase of 28% over the year before. In particular, the salary of UK£149.0k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the British Commercial Services industry with market capitalizations below UK£154m, we found that the median total CEO compensation was UK£263k. In other words, REACT Group pays its CEO lower than the industry median.

Component	2024	2023	Proportion (2024)
Salary	UK£149k	UK£116k	81%
Other	UK£35k	UK£28k	19%
Total Compensation	UK£184k	UK£144k	100%

Speaking on an industry level, nearly 62% of total compensation represents salary, while the remainder of 38% is other remuneration. According to our research, REACT Group has allocated a higher percentage of pay to salary in comparison to the wider 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 REACT Group PLC's Growth Numbers

REACT Group PLC has reduced its earnings per share by 73% a year over the last three years. In the last year, its revenue is up 6.0%.

The decline in EPS is a bit concerning. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has REACT Group PLC Been A Good Investment?

Given the total shareholder loss of 26% over three years, many shareholders in REACT Group PLC are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO 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.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 3 warning signs for REACT 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.

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

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.