Wendy Lawrence has been the CEO of Totally plc (LON:TLY) since 2013. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Wendy Lawrence's Compensation Compare With Similar Sized Companies?
Our data indicates that Totally plc is worth UK£17m, and total annual CEO compensation is UK£165k. (This number is for the twelve months until March 2018). It is worth noting that the CEO compensation consists almost entirely of the salary, worth UK£159k. We looked at a group of companies with market capitalizations under UK£164m, and the median CEO total compensation was UK£252k.
Most shareholders would consider it a positive that Wendy Lawrence takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see, below, how CEO compensation at Totally has changed over time.
Is Totally plc Growing?
Totally plc has increased its earnings per share (EPS) by an average of 87% a year, over the last three years (using a line of best fit). Its revenue is up 129% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see.
Has Totally plc Been A Good Investment?
Since shareholders would have lost about 86% over three years, some Totally plc shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
It appears that Totally plc remunerates its CEO below most similar sized companies.
Many would consider this to indicate that the pay is modest since the business is growing. Despite some positives, it is likely that shareholders wanted better returns, given the performance over the last three years. We're not critical of the remuneration Wendy Lawrence receives, but it would be good to see improved returns to shareholders before the remuneration grows too much. In this case we may want to look deeper into the company. There are some real positives and we could see improved returns in the longer term. Shareholders may want to check for free if Totally insiders are buying or selling shares.
If you want to buy a stock that is better than Totally, this free list of high return, low debt companies is a great place to look.
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