Stock Analysis

Here's Why Shareholders May Want To Be Cautious With Increasing Tribal Group plc's (LON:TRB) CEO Pay Packet

  •  Updated
AIM:TRB
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Performance at Tribal Group plc (LON:TRB) has been reasonably good and CEO Mark Pickett has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 27 April 2021. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

See our latest analysis for Tribal Group

Comparing Tribal Group plc's CEO Compensation With the industry

At the time of writing, our data shows that Tribal Group plc has a market capitalization of UK£205m, and reported total annual CEO compensation of UK£978k for the year to December 2020. That's a notable increase of 12% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at UK£257k.

On comparing similar companies from the same industry with market caps ranging from UK£72m to UK£287m, we found that the median CEO total compensation was UK£213k. Hence, we can conclude that Mark Pickett is remunerated higher than the industry median. What's more, Mark Pickett holds UK£730k worth of shares in the company in their own name.

Component20202019Proportion (2020)
Salary UK£257k UK£270k 26%
Other UK£721k UK£604k 74%
Total CompensationUK£978k UK£874k100%

Talking in terms of the industry, salary represented approximately 68% of total compensation out of all the companies we analyzed, while other remuneration made up 32% of the pie. In Tribal Group's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
AIM:TRB CEO Compensation April 21st 2021

A Look at Tribal Group plc's Growth Numbers

Tribal Group plc's earnings per share (EPS) grew 32% per year over the last three years. In the last year, its revenue is down 6.7%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 Tribal Group plc Been A Good Investment?

Tribal Group plc has generated a total shareholder return of 26% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 4 warning signs for Tribal Group (1 can't be ignored!) that you should be aware of before investing here.

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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