Here's Why Shareholders Should Examine Playtech plc's (LON:PTEC) CEO Compensation Package More Closely

The results at Playtech plc (LON:PTEC) have been quite disappointing recently and CEO Mor Weizer bears some responsibility for this. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 26 May 2021. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. From our analysis, we think CEO compensation may need a review in light of the recent performance.

See our latest analysis for Playtech

How Does Total Compensation For Mor Weizer Compare With Other Companies In The Industry?

At the time of writing, our data shows that Playtech plc has a market capitalization of UK£1.3b, and reported total annual CEO compensation of €1.9m for the year to December 2020. That's a notable decrease of 35% on last year. Notably, the salary which is €1.12m, represents a considerable chunk of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations ranging from UK£706m to UK£2.3b, the reported median CEO total compensation was €641k. Hence, we can conclude that Mor Weizer is remunerated higher than the industry median. Moreover, Mor Weizer also holds UK£1.3m worth of Playtech stock directly under their own name.

Component	2020	2019	Proportion (2020)
Salary	€1.1m	€1.1m	59%
Other	€780k	€1.8m	41%
Total Compensation	€1.9m	€2.9m	100%

Speaking on an industry level, nearly 79% of total compensation represents salary, while the remainder of 21% is other remuneration. In Playtech'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.

Playtech plc's Growth

Playtech plc has reduced its earnings per share by 98% a year over the last three years. Its revenue is down 25% over the previous year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Playtech plc Been A Good Investment?

With a total shareholder return of -40% over three years, Playtech plc shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business 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. We've identified 1 warning sign for Playtech that investors should be aware of in a dynamic business environment.

Important note: Playtech 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. 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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