How Is SDI Group's (LON:SDI) CEO Paid Relative To Peers?

Mike Creedon has been the CEO of SDI Group plc (LON:SDI) since 2012, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether SDI Group pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for SDI Group

How Does Total Compensation For Mike Creedon Compare With Other Companies In The Industry?

According to our data, SDI Group plc has a market capitalization of UK£114m, and paid its CEO total annual compensation worth UK£236k over the year to April 2020. That's a notable increase of 16% on last year. In particular, the salary of UK£141.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between UK£73m and UK£291m had a median total CEO compensation of UK£236k. This suggests that SDI Group remunerates its CEO largely in line with the industry average. Furthermore, Mike Creedon directly owns UK£518k worth of shares in the company.

On an industry level, around 62% of total compensation represents salary and 38% is other remuneration. Although there is a difference in how total compensation is set, SDI Group more or less reflects the market in terms of setting the salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at SDI Group plc's Growth Numbers

SDI Group plc's earnings per share (EPS) grew 29% per year over the last three years. In the last year, its revenue is up 30%.

Shareholders would be glad to know that the company has improved itself over the last few years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. 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 SDI Group plc Been A Good Investment?

We think that the total shareholder return of 297%, over three years, would leave most SDI Group plc shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

As we noted earlier, SDI Group pays its CEO in line with similar-sized companies belonging to the same industry. Few would be critical of the leadership, since returns have been juicy and EPS are moving in the right direction. Indeed, many might consider that Mike is compensated rather modestly, given the solid company performance! Also, such solid returns might lead to shareholders warming to the idea of a bump in pay.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for SDI Group that investors should think about before committing capital to this stock.

Important note: SDI 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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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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