Should You Worry About Michelmersh Brick Holdings plc’s (LON:MBH) CEO Pay?

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Frank Hanna became the CEO of Michelmersh Brick Holdings plc (LON:MBH) in 2016. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. 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.

See our latest analysis for Michelmersh Brick Holdings

How Does Frank Hanna’s Compensation Compare With Similar Sized Companies?

Our data indicates that Michelmersh Brick Holdings plc is worth UK£84m, and total annual CEO compensation is UK£348k. (This number is for the twelve months until December 2018). While we always look at total compensation first, we note that the salary component is less, at UK£198k. We examined a group of similar sized companies, with market capitalizations of below UK£160m. The median CEO total compensation in that group is UK£246k.

As you can see, Frank Hanna is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Michelmersh Brick Holdings plc is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

The graphic below shows how CEO compensation at Michelmersh Brick Holdings has changed from year to year.

AIM:MBH CEO Compensation, July 8th 2019
AIM:MBH CEO Compensation, July 8th 2019

Is Michelmersh Brick Holdings plc Growing?

Earnings per share at Michelmersh Brick Holdings plc are much the same as they were three years ago, albeit slightly lower, based on the trend. In the last year, its revenue is up 22%.

The lack of earnings per share growth in the last three years is unimpressive. And while it’s good to see some good revenue growth recently, the growth isn’t really fast enough for me to put aside my concerns around earnings. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO.

Has Michelmersh Brick Holdings plc Been A Good Investment?

Boasting a total shareholder return of 85% over three years, Michelmersh Brick Holdings plc has done well by shareholders. 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…

We examined the amount Michelmersh Brick Holdings plc pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.

On the other hand, returns have been good, so the company is doing something right. Given this situation we doubt shareholders are particularly concerned about the CEO compensation. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Michelmersh Brick Holdings (free visualization of insider trades).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.