The CEO of Plexus Holdings plc (LON:POS) is Ben van Bilderbeek, 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.
See our latest analysis for Plexus Holdings
How Does Total Compensation For Ben van Bilderbeek Compare With Other Companies In The Industry?
Our data indicates that Plexus Holdings plc has a market capitalization of UK£19m, and total annual CEO compensation was reported as UK£339k for the year to June 2020. Notably, that's an increase of 8.4% over the year before. Notably, the salary which is UK£305.5k, represents most of the total compensation being paid.
In comparison with other companies in the industry with market capitalizations under UK£146m, the reported median total CEO compensation was UK£352k. So it looks like Plexus Holdings compensates Ben van Bilderbeek in line with the median for the industry. Furthermore, Ben van Bilderbeek directly owns UK£58k worth of shares in the company.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | UK£305k | UK£279k | 90% |
| Other | UK£34k | UK£34k | 10% |
| Total Compensation | UK£339k | UK£313k | 100% |
Speaking on an industry level, nearly 70% of total compensation represents salary, while the remainder of 30% is other remuneration. Plexus Holdings is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Plexus Holdings plc's Growth
Plexus Holdings plc's earnings per share (EPS) grew 6.2% per year over the last three years. It saw its revenue drop 85% over the last year.
We generally like to see a little revenue growth, but the modest improvement in EPS is good. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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?
Since shareholders would have lost about 73% over three years, some Plexus Holdings plc investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.
To Conclude...
As we touched on above, Plexus Holdings plc is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. This doesn't look good when you place it against the backdrop of negative shareholder returns and flat EPS growth. We'd stop short of saying CEO compensation is inappropriate, but without an improvement in performance, it's sure to draw criticism. Shareholders will also not want to see performance improving before agreeing to any raise.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 6 warning signs for Plexus Holdings (2 make us uncomfortable!) that you should be aware of before investing here.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
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This 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:POS
Plexus Holdings
Provides equipment and services for the oil and gas drilling industry in the United Kingdom, the United States, and internationally.
Excellent balance sheet and good value.
