Shareholders Would Not Be Objecting To EMIS Group plc's (LON:EMIS) CEO Compensation And Here's Why

We have been pretty impressed with the performance at EMIS Group plc (LON:EMIS) recently and CEO Andy Thorburn deserves a mention for their role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 06 May 2021. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.

Check out our latest analysis for EMIS Group

How Does Total Compensation For Andy Thorburn Compare With Other Companies In The Industry?

Our data indicates that EMIS Group plc has a market capitalization of UK£775m, and total annual CEO compensation was reported as UK£1.1m for the year to December 2020. We note that's an increase of 35% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at UK£409k.

On comparing similar companies from the same industry with market caps ranging from UK£287m to UK£1.1b, we found that the median CEO total compensation was UK£985k. From this we gather that Andy Thorburn is paid around the median for CEOs in the industry. Furthermore, Andy Thorburn directly owns UK£571k worth of shares in the company.

Component	2020	2019	Proportion (2020)
Salary	UK£409k	UK£400k	37%
Other	UK£689k	UK£414k	63%
Total Compensation	UK£1.1m	UK£814k	100%

On an industry level, around 88% of total compensation represents salary and 12% is other remuneration. EMIS Group sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

EMIS Group plc's Growth

EMIS Group plc's earnings per share (EPS) grew 55% per year over the last three years. The trailing twelve months of revenue was pretty much the same as the prior period.

Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has EMIS Group plc Been A Good Investment?

We think that the total shareholder return of 54%, over three years, would leave most EMIS Group plc shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

So you may want to check if insiders are buying EMIS Group shares with their own money (free access).

Important note: EMIS 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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