The Compensation For Michelmersh Brick Holdings plc's (LON:MBH) CEO Looks Deserved And Here's Why

We have been pretty impressed with the performance at Michelmersh Brick Holdings plc (LON:MBH) recently and CEO Frank Hanna deserves a mention for their role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 03 June 2021. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. Here is our take on why we think CEO compensation is not extravagant.

View our latest analysis for Michelmersh Brick Holdings

Comparing Michelmersh Brick Holdings plc's CEO Compensation With the industry

Our data indicates that Michelmersh Brick Holdings plc has a market capitalization of UK£128m, and total annual CEO compensation was reported as UK£385k for the year to December 2020. Notably, that's a decrease of 20% over the year before. Notably, the salary which is UK£205.0k, represents a considerable chunk of the total compensation being paid.

On comparing similar companies from the same industry with market caps ranging from UK£71m to UK£282m, we found that the median CEO total compensation was UK£301k. This suggests that Michelmersh Brick Holdings remunerates its CEO largely in line with the industry average. Furthermore, Frank Hanna directly owns UK£807k worth of shares in the company.

Component	2020	2019	Proportion (2020)
Salary	UK£205k	UK£205k	53%
Other	UK£180k	UK£277k	47%
Total Compensation	UK£385k	UK£482k	100%

Talking in terms of the industry, salary represented approximately 53% of total compensation out of all the companies we analyzed, while other remuneration made up 47% of the pie. Although there is a difference in how total compensation is set, Michelmersh Brick Holdings 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.

Michelmersh Brick Holdings plc's Growth

Michelmersh Brick Holdings plc's earnings per share (EPS) grew 26% per year over the last three years. Its revenue is down 2.7% over the previous year.

This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. 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 Michelmersh Brick Holdings plc Been A Good Investment?

Most shareholders would probably be pleased with Michelmersh Brick Holdings plc for providing a total return of 50% over three years. 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.

To Conclude...

Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

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 2 warning signs for Michelmersh Brick Holdings that investors should think about before committing capital to this stock.

Switching gears from Michelmersh Brick Holdings, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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