Mor Weizer became the CEO of Playtech plc (LON:PTEC) in 2007, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Playtech.
Comparing Playtech plc's CEO Compensation With the industry
At the time of writing, our data shows that Playtech plc has a market capitalization of UK£1.1b, and reported total annual CEO compensation of €2.9m for the year to December 2019. That's a notable increase of 43% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at €1.1m.
On examining similar-sized companies in the industry with market capitalizations between UK£750m and UK£2.4b, we discovered that the median CEO total compensation of that group was €1.5m. This suggests that Mor Weizer is paid more than the median for the industry. Moreover, Mor Weizer also holds UK£1.0m worth of Playtech stock directly under their own name.
Talking in terms of the industry, salary represented approximately 74% of total compensation out of all the companies we analyzed, while other remuneration made up 26% of the pie. Playtech sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at Playtech plc's Growth Numbers
Over the last three years, Playtech plc has shrunk its earnings per share by 73% per year. It saw its revenue drop 11% over the last year.
The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation 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?
Given the total shareholder loss of 49% over three years, many shareholders in Playtech plc are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
As we touched on above, Playtech plc is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Disappointingly, share price gains over the last three years have failed to materialize. To make matters worse, EPS growth has also been negative during this period. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.
CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for Playtech 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.
When trading Playtech or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account.
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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email email@example.com.