Here's Why Shareholders Will Not Be Complaining About Best of the Best PLC's (LON:BOTB) CEO Pay Packet

By
Simply Wall St
Published
September 08, 2021
AIM:BOTB
Source: Shutterstock

The performance at Best of the Best PLC (LON:BOTB) has been quite strong recently and CEO Will Hindmarch has played a role in it. Coming up to the next AGM on 15 September 2021, shareholders would be keeping this in mind. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

See our latest analysis for Best of the Best

Comparing Best of the Best PLC's CEO Compensation With the industry

According to our data, Best of the Best PLC has a market capitalization of UK£62m, and paid its CEO total annual compensation worth UK£267k over the year to April 2021. That's just a smallish increase of 7.7% on last year. In particular, the salary of UK£170.0k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the industry with market capitalizations below UK£145m, we found that the median total CEO compensation was UK£221k. This suggests that Best of the Best remunerates its CEO largely in line with the industry average. Furthermore, Will Hindmarch directly owns UK£20m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20212019Proportion (2021)
Salary UK£170k UK£150k 64%
Other UK£97k UK£98k 36%
Total CompensationUK£267k UK£248k100%

On an industry level, roughly 81% of total compensation represents salary and 19% is other remuneration. In Best of the Best's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

ceo-compensation
AIM:BOTB CEO Compensation September 9th 2021

A Look at Best of the Best PLC's Growth Numbers

Best of the Best PLC's earnings per share (EPS) grew 110% per year over the last three years. It achieved revenue growth of 157% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. 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 Best of the Best PLC Been A Good Investment?

Boasting a total shareholder return of 187% over three years, Best of the Best PLC has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 4 warning signs for Best of the Best you should be aware of, and 1 of them shouldn't be ignored.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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