Here's What We Learned About The CEO Pay At ReNeuron Group plc (LON:RENE)

Olav Hellebo has been the CEO of ReNeuron Group plc (LON:RENE) since 2014, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

View our latest analysis for ReNeuron Group

Comparing ReNeuron Group plc's CEO Compensation With the industry

At the time of writing, our data shows that ReNeuron Group plc has a market capitalization of UK£31m, and reported total annual CEO compensation of UK£397k for the year to March 2020. Notably, that's a decrease of 26% over the year before. Notably, the salary which is UK£364.0k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under UK£151m, the reported median total CEO compensation was UK£290k. Accordingly, our analysis reveals that ReNeuron Group plc pays Olav Hellebo north of the industry median.

Talking in terms of the industry, salary represented approximately 66% of total compensation out of all the companies we analyzed, while other remuneration made up 34% of the pie. ReNeuron Group is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

ReNeuron Group plc's Growth

ReNeuron Group plc has seen its earnings per share (EPS) increase by 13% a year over the past three years. In the last year, its revenue is up 125%.

This demonstrates that the company has been improving recently and is good news for the shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast 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 ReNeuron Group plc Been A Good Investment?

With a three year total loss of 50% for the shareholders, ReNeuron Group plc would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As previously discussed, Olav is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, the EPS growth is certainly impressive, but we cannot say the same about the uninspiring shareholder returns (over the last three years). Although we'd stop short of calling it inappropriate, we think Olav is earning a very handsome sum.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 4 warning signs for ReNeuron Group (1 doesn't sit too well with us!) that you should be aware of before investing here.

Switching gears from ReNeuron Group, 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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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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