How Does Omega Diagnostics Group's (LON:ODX) CEO Salary Compare to Peers?

This article will reflect on the compensation paid to Colin King who has served as CEO of Omega Diagnostics Group PLC (LON:ODX) since 2017. This analysis will also assess whether Omega Diagnostics Group pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Omega Diagnostics Group

Comparing Omega Diagnostics Group PLC's CEO Compensation With the industry

According to our data, Omega Diagnostics Group PLC has a market capitalization of UK£151m, and paid its CEO total annual compensation worth UK£201k over the year to March 2020. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at UK£191.6k constitutes the majority of total compensation received by the CEO.

On comparing similar companies from the same industry with market caps ranging from UK£72m to UK£287m, we found that the median CEO total compensation was UK£236k. From this we gather that Colin King is paid around the median for CEOs in the industry. Moreover, Colin King also holds UK£709k worth of Omega Diagnostics Group stock directly under their own name.

Talking in terms of the industry, salary represented approximately 62% of total compensation out of all the companies we analyzed, while other remuneration made up 38% of the pie. Omega Diagnostics Group is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Omega Diagnostics Group PLC's Growth

Over the last three years, Omega Diagnostics Group PLC has shrunk its earnings per share by 86% per year. Its revenue is down 5.4% over the previous year.

Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Omega Diagnostics Group PLC Been A Good Investment?

Most shareholders would probably be pleased with Omega Diagnostics Group PLC for providing a total return of 435% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Omega Diagnostics Group pays its CEO a majority of compensation through a salary. As previously discussed, Colin is compensated close to the median for companies of its size, and which belong to the same industry. This doesn't look good when you see that EPS growth over the last three years has been negative. 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.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 3 warning signs for Omega Diagnostics Group (1 is a bit concerning!) 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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