Our View On Tavistock Investments' (LON:TAVI) CEO Pay

The CEO of Tavistock Investments Plc (LON:TAVI) is Brian Raven, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Tavistock Investments pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Tavistock Investments

How Does Total Compensation For Brian Raven Compare With Other Companies In The Industry?

Our data indicates that Tavistock Investments Plc has a market capitalization of UK£8.8m, and total annual CEO compensation was reported as UK£289k for the year to March 2020. This means that the compensation hasn't changed much from last year. We note that the salary portion, which stands at UK£220.0k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the industry with market capitalizations below UK£147m, we found that the median total CEO compensation was UK£240k. This suggests that Tavistock Investments remunerates its CEO largely in line with the industry average. Moreover, Brian Raven also holds UK£959k worth of Tavistock Investments stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, around 49% of total compensation represents salary and 51% is other remuneration. Tavistock Investments is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Tavistock Investments Plc's Growth

Over the last three years, Tavistock Investments Plc has shrunk its earnings per share by 132% per year. The trailing twelve months of revenue was pretty much the same as the prior period.

The decline in EPS is a bit concerning. And the flat revenue hardly impresses. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Tavistock Investments Plc Been A Good Investment?

Since shareholders would have lost about 58% over three years, some Tavistock Investments Plc investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As previously discussed, Brian is compensated close to the median for companies of its size, and which belong to the same industry. In the meantime, the company has reported declining EPS growth and shareholder returns over the last three years. We'd stop short of saying compensation is inappropriate, but we would understand if shareholders had questions regarding a future raise.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 4 warning signs for Tavistock Investments (of which 1 doesn't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Tavistock Investments, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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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