What Does Clinigen Group's (LON:CLIN) CEO Pay Reveal?

By
Simply Wall St
Published
December 19, 2020

This article will reflect on the compensation paid to Shaun Chilton who has served as CEO of Clinigen Group plc (LON:CLIN) since 2016. This analysis will also assess whether Clinigen Group pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Clinigen Group

How Does Total Compensation For Shaun Chilton Compare With Other Companies In The Industry?

At the time of writing, our data shows that Clinigen Group plc has a market capitalization of UK£895m, and reported total annual CEO compensation of UK£1.5m for the year to June 2020. Notably, that's a decrease of 42% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at UK£600k.

On examining similar-sized companies in the industry with market capitalizations between UK£741m and UK£2.4b, we discovered that the median CEO total compensation of that group was UK£1.5m. From this we gather that Shaun Chilton is paid around the median for CEOs in the industry. Moreover, Shaun Chilton also holds UK£2.2m worth of Clinigen Group stock directly under their own name.

Component20202019Proportion (2020)
Salary UK£600k UK£600k 40%
Other UK£889k UK£2.0m 60%
Total CompensationUK£1.5m UK£2.6m100%

On an industry level, roughly 49% of total compensation represents salary and 51% is other remuneration. Clinigen Group pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

AIM:CLIN CEO Compensation December 19th 2020

Clinigen Group plc's Growth

Clinigen Group plc has seen its earnings per share (EPS) increase by 46% a year over the past three years. In the last year, its revenue is up 10%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. 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 Clinigen Group plc Been A Good Investment?

Since shareholders would have lost about 33% over three years, some Clinigen Group plc investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we touched on above, Clinigen Group plc is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Meanwhile, shareholder returns paint a sorry picture for the company, finishing in the red over the last three years. However, EPS growth is positive over the same time frame. Overall, we wouldn't say Shaun is paid an unjustified compensation, but shareholders might not favor a raise before shareholder returns show a positive trend.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 2 warning signs (and 1 which is potentially serious) in Clinigen Group we think you should know about.

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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