Should Shareholders Reconsider The Parkmead Group plc's (LON:PMG) CEO Compensation Package?

Key Insights

• Parkmead Group to hold its Annual General Meeting on 23rd of December
• Salary of UK£506.0k is part of CEO Tom Cross's total remuneration
• Total compensation is 50% above industry average
• Over the past three years, Parkmead Group's EPS fell by 16% and over the past three years, the total loss to shareholders 53%

Shareholders will probably not be too impressed with the underwhelming results at The Parkmead Group plc (LON:PMG) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 23rd of December. 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.

View our latest analysis for Parkmead Group

How Does Total Compensation For Tom Cross Compare With Other Companies In The Industry?

At the time of writing, our data shows that The Parkmead Group plc has a market capitalization of UK£21m, and reported total annual CEO compensation of UK£509k for the year to June 2024. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at UK£506.0k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the British Oil and Gas industry with market capitalizations under UK£158m, the reported median total CEO compensation was UK£340k. This suggests that Tom Cross is paid more than the median for the industry. Furthermore, Tom Cross directly owns UK£5.0m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	UK£506k	UK£506k	99%
Other	UK£3.0k	UK£2.0k	1%
Total Compensation	UK£509k	UK£508k	100%

Speaking on an industry level, nearly 73% of total compensation represents salary, while the remainder of 27% is other remuneration. Parkmead Group is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at The Parkmead Group plc's Growth Numbers

The Parkmead Group plc has reduced its earnings per share by 16% a year over the last three years. Its revenue is down 61% over the previous year.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet 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 The Parkmead Group plc Been A Good Investment?

The return of -53% over three years would not have pleased The Parkmead Group plc shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Parkmead Group pays its CEO a majority of compensation through a salary. Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 3 warning signs (and 2 which are a bit concerning) in Parkmead Group we think you should know about.

Important note: Parkmead Group is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.