Al Sisto has been the CEO of Tern Plc (LON:TERN) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
View our latest analysis for Tern
How Does Total Compensation For Al Sisto Compare With Other Companies In The Industry?
Our data indicates that Tern Plc has a market capitalization of UK£21m, and total annual CEO compensation was reported as UK£126k for the year to December 2019. Notably, that's an increase of 49% over the year before. Notably, the salary of UK£126k is the entirety of the CEO compensation.
In comparison with other companies in the industry with market capitalizations under UK£148m, the reported median total CEO compensation was UK£238k. That is to say, Al Sisto is paid under the industry median. Moreover, Al Sisto also holds UK£460k worth of Tern stock directly under their own name.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | UK£126k | UK£84k | 100% |
| Other | - | - | - |
| Total Compensation | UK£126k | UK£84k | 100% |
On an industry level, roughly 49% of total compensation represents salary and 51% is other remuneration. At the company level, Tern pays Al Sisto solely through a salary, preferring to go down a conventional route. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at Tern Plc's Growth Numbers
Tern Plc has seen its earnings per share (EPS) increase by 40% a year over the past three years. Its revenue is up 22% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. 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 Tern Plc Been A Good Investment?
Boasting a total shareholder return of 176% over three years, Tern Plc has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
To Conclude...
Tern pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As we touched on above, Tern Plc is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Since EPS growth is heading in a positive direction; many would agree with our assessment that the pay is modest. Plus, we can't ignore the impressive shareholder returns, and won't be surprised if some shareholders were to reward such excellent all-around performance with a raise.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 5 warning signs for Tern (2 are a bit concerning!) that you should be aware of before investing here.
Switching gears from Tern, 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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Access Free AnalysisThis 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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About AIM:TERN
Tern
A venture capital firm specializing in early-stage and growth capital investment.
Moderate with adequate balance sheet.
