Here's Why Shareholders Should Examine Getech Group plc's (LON:GTC) CEO Compensation Package More Closely

Shareholders will probably not be too impressed with the underwhelming results at Getech Group plc (LON:GTC) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 30 June 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. We present the case why we think CEO compensation is out of sync with company performance.

Check out our latest analysis for Getech Group

How Does Total Compensation For Jonathan Copus Compare With Other Companies In The Industry?

At the time of writing, our data shows that Getech Group plc has a market capitalization of UK£15m, and reported total annual CEO compensation of UK£251k for the year to December 2020. We note that's a decrease of 14% compared to last year. We note that the salary portion, which stands at UK£234.0k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under UK£144m, the reported median total CEO compensation was UK£273k. So it looks like Getech Group compensates Jonathan Copus in line with the median for the industry.

Component	2020	2019	Proportion (2020)
Salary	UK£234k	UK£263k	93%
Other	UK£17k	UK£28k	7%
Total Compensation	UK£251k	UK£291k	100%

On an industry level, around 69% of total compensation represents salary and 31% is other remuneration. It's interesting to note that Getech Group pays out a greater portion of remuneration through salary, compared to the industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Getech Group plc's Growth Numbers

Getech Group plc has reduced its earnings per share by 82% a year over the last three years. In the last year, its revenue is down 41%.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Getech Group plc Been A Good Investment?

With a total shareholder return of -40% over three years, Getech Group plc shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 4 warning signs (and 2 which can't be ignored) in Getech Group we think you should know about.

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.

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