Stock Analysis

A Quick Analysis On Egdon Resources' (LON:EDR) CEO Compensation

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AIM:EDR
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The CEO of Egdon Resources plc (LON:EDR) is Mark Anthony Abbott, and this article examines the executive's compensation against the backdrop of overall company performance. 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 Egdon Resources

How Does Total Compensation For Mark Anthony Abbott Compare With Other Companies In The Industry?

Our data indicates that Egdon Resources plc has a market capitalization of UK£6.9m, and total annual CEO compensation was reported as UK£195k for the year to July 2020. That's a slightly lower by 5.3% over the previous year. In particular, the salary of UK£183.6k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below UK£147m, reported a median total CEO compensation of UK£284k. This suggests that Mark Anthony Abbott is paid below the industry median. Furthermore, Mark Anthony Abbott directly owns UK£250k worth of shares in the company.

Component20202019Proportion (2020)
Salary UK£184k UK£178k 94%
Other UK£11k UK£28k 6%
Total CompensationUK£195k UK£206k100%

On an industry level, around 64% of total compensation represents salary and 36% is other remuneration. According to our research, Egdon Resources has allocated a higher percentage of pay to salary in comparison to the wider 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.

ceo-compensation
AIM:EDR CEO Compensation January 16th 2021

Egdon Resources plc's Growth

Over the last three years, Egdon Resources plc has shrunk its earnings per share by 31% per year. Its revenue is down 56% over the previous year.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. 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 Egdon Resources plc Been A Good Investment?

Given the total shareholder loss of 70% over three years, many shareholders in Egdon Resources plc are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

As previously discussed, Mark Anthony is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. While we are quite underwhelmed with EPS growth, the shareholder returns over the past three years have also failed to impress us. We can't say the CEO compensation is high, but shareholders will be cold to a bump at this stage, considering negative investor returns.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 5 warning signs for Egdon Resources (1 is potentially serious!) that you should be aware of before investing here.

Switching gears from Egdon Resources, 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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