Shareholders May Be More Conservative With IG Design Group plc's (LON:IGR) CEO Compensation For Now

In the past three years, shareholders of IG Design Group plc (LON:IGR) have seen a loss on their investment. In addition, the company's per-share earnings growth is not looking good, despite growing revenues. Shareholders will have a chance to take their concerns to the board at the next AGM on 20 September 2021 and vote on resolutions including executive compensation, which studies show may have an impact on company performance. We think shareholders may be cautious of approving a pay rise for the CEO at the moment, based on our analysis below.

See our latest analysis for IG Design Group

Comparing IG Design Group plc's CEO Compensation With the industry

Our data indicates that IG Design Group plc has a market capitalization of UK£523m, and total annual CEO compensation was reported as US$1.5m for the year to March 2021. Notably, that's an increase of 17% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$551k.

For comparison, other companies in the same industry with market capitalizations ranging between UK£291m and UK£1.2b had a median total CEO compensation of US$981k. Accordingly, our analysis reveals that IG Design Group plc pays Paul Fineman north of the industry median.

Component	2021	2020	Proportion (2021)
Salary	US$551k	US$498k	36%
Other	US$961k	US$790k	64%
Total Compensation	US$1.5m	US$1.3m	100%

On an industry level, around 69% of total compensation represents salary and 31% is other remuneration. IG Design Group sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at IG Design Group plc's Growth Numbers

Over the last three years, IG Design Group plc has shrunk its earnings per share by 34% per year. In the last year, its revenue is up 40%.

The reduction in EPS, over three years, is arguably concerning. On the other hand, the strong revenue growth suggests the business is growing. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 IG Design Group plc Been A Good Investment?

Given the total shareholder loss of 8.5% over three years, many shareholders in IG Design Group plc are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

The loss to shareholders over the past three years is certainly concerning and possibly has something to do with the fact that the company's earnings haven't grown. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

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 IG Design Group that you should be aware of before investing.

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.
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