Craig Gulliford became the CEO of Creo Medical Limited (LON:CREO) in 2012, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Creo Medical pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
How Does Total Compensation For Craig Gulliford Compare With Other Companies In The Industry?
At the time of writing, our data shows that Creo Medical Limited has a market capitalization of UK£265m, and reported total annual CEO compensation of UK£1.0m for the year to December 2019. Notably, that's a decrease of 17% over the year before. Notably, the salary which is UK£674.9k, represents most of the total compensation being paid.
For comparison, other companies in the same industry with market capitalizations ranging between UK£155m and UK£618m had a median total CEO compensation of UK£1.0m. This suggests that Creo Medical remunerates its CEO largely in line with the industry average. What's more, Craig Gulliford holds UK£1.0m worth of shares in the company in their own name.
On an industry level, roughly 62% of total compensation represents salary and 38% is other remuneration. Our data reveals that Creo Medical allocates salary more or less in line with the wider market. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Creo Medical Limited's Growth
Over the last three years, Creo Medical Limited has shrunk its earnings per share by 4.5% per year. It achieved revenue growth of 5.5% over the last year.
Few shareholders would be pleased to read that EPS have declined. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Creo Medical Limited Been A Good Investment?
Boasting a total shareholder return of 104% over three years, Creo Medical Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
As previously discussed, Craig is compensated close to the median for companies of its size, and which belong to the same industry. This isn't great when you look at it against the backdrop of EPS growth, which has been negative for the past three years. On the other hand, shareholder returns are showing positive trends over the same time frame. We wouldn't say CEO compensation is too high, but shareholders will probably want to see an increase in EPS before agreeing the business should pay any more.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 4 warning signs for Creo Medical (of which 2 are significant!) that you should know about in order to have a holistic understanding of the stock.
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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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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