What Can We Learn About EMIS Group's (LON:EMIS) CEO Compensation?

Andy Thorburn has been the CEO of EMIS Group plc (LON:EMIS) since 2017, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

View our latest analysis for EMIS Group

Comparing EMIS Group plc's CEO Compensation With the industry

According to our data, EMIS Group plc has a market capitalization of UK£615m, and paid its CEO total annual compensation worth UK£817k over the year to December 2019. That's a notable decrease of 11% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at UK£400k.

On comparing similar companies from the same industry with market caps ranging from UK£301m to UK£1.2b, we found that the median CEO total compensation was UK£797k. So it looks like EMIS Group compensates Andy Thorburn in line with the median for the industry. Furthermore, Andy Thorburn directly owns UK£453k worth of shares in the company.

On an industry level, roughly 85% of total compensation represents salary and 15% is other remuneration. In EMIS Group's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at EMIS Group plc's Growth Numbers

Over the past three years, EMIS Group plc has seen its earnings per share (EPS) grow by 14% per year. It achieved revenue growth of 1.8% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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?

EMIS Group plc has generated a total shareholder return of 13% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

As we touched on above, EMIS Group 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. But EPS growth over the last three years has been impressive, although the same cannot be said for shareholder returns. So considering these factors, we think the compensation is probably quite reasonable, but investor returns need a boost moving forward.

Whatever your view on compensation, you might want to check if insiders are buying or selling EMIS Group shares (free trial).

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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