It's Probably Less Likely That Plexus Holdings plc's (LON:POS) CEO Will See A Huge Pay Rise This Year

In the past three years, the share price of Plexus Holdings plc (LON:POS) has struggled to grow and now shareholders are sitting on a loss. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 20 December 2021. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Plexus Holdings

Comparing Plexus Holdings plc's CEO Compensation With the industry

At the time of writing, our data shows that Plexus Holdings plc has a market capitalization of UK£8.0m, and reported total annual CEO compensation of UK£349k for the year to June 2021. That's mostly flat as compared to the prior year's compensation. In particular, the salary of UK£294.0k, 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£151m, reported a median total CEO compensation of UK£318k. From this we gather that Ben van Bilderbeek is paid around the median for CEOs in the industry.

Component	2021	2020	Proportion (2021)
Salary	UK£294k	UK£305k	84%
Other	UK£55k	UK£34k	16%
Total Compensation	UK£349k	UK£339k	100%

On an industry level, roughly 56% of total compensation represents salary and 44% is other remuneration. According to our research, Plexus Holdings 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.

A Look at Plexus Holdings plc's Growth Numbers

Over the past three years, Plexus Holdings plc has seen its earnings per share (EPS) grow by 4.6% per year. Its revenue is up 284% over the last year.

It's hard to interpret the strong revenue growth as anything other than a positive. With that in mind, the modestly improving EPS seems positive. We wouldn't say this is necessarily top notch growth, but it is certainly promising. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Plexus Holdings plc Been A Good Investment?

The return of -83% over three years would not have pleased Plexus Holdings plc shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 4 warning signs for Plexus Holdings that you should be aware of before investing.

Switching gears from Plexus Holdings, 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. 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.