What We Learned About Futura Medical's (LON:FUM) CEO Compensation

James Barder became the CEO of Futura Medical plc (LON:FUM) in 2001, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Futura Medical

How Does Total Compensation For James Barder Compare With Other Companies In The Industry?

Our data indicates that Futura Medical plc has a market capitalization of UK£37m, and total annual CEO compensation was reported as UK£238k for the year to December 2019. We note that's a decrease of 14% compared to last year. In particular, the salary of UK£235.6k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the industry with market capitalizations below UK£148m, we found that the median total CEO compensation was UK£238k. So it looks like Futura Medical compensates James Barder in line with the median for the industry. Furthermore, James Barder directly owns UK£185k worth of shares in the company.

On an industry level, around 44% of total compensation represents salary and 56% is other remuneration. Futura Medical has gone down a largely traditional route, paying James Barder a high salary, giving it preference over non-salary benefits. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Futura Medical plc's Growth

Over the last three years, Futura Medical plc has shrunk its earnings per share by 5.3% per year. In the last year, its revenue is up 166%.

Investors would be a bit wary of companies that have lower EPS On the other hand, the strong revenue growth suggests the business is growing. It's hard to reach a conclusion about business performance right now. This may be one to watch. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Futura Medical plc Been A Good Investment?

With a three year total loss of 37% for the shareholders, Futura Medical plc would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

James receives almost all of their compensation through a salary. As we noted earlier, Futura Medical pays its CEO in line with similar-sized companies belonging to the same industry. However, revenues have increased over the past year, a positive sign for the company. On the other hand, shareholder returns for James are negative over the same period. EPS growth is also negative, adding insult to injury. It's tough for us to say James is overpaid but a mixed bag in terms of performance will surely irk shareholders and reduce chances of a raise.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 5 warning signs (and 2 which are concerning) in Futura Medical we think you should know about.

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

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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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