Is Gear4music (Holdings) plc (LON:G4M) Overpaying Its CEO?
Simply Wall St
March 11, 2019
Andrew Wass is the CEO of Gear4music (Holdings) plc (LON:G4M).
This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size.
After that, we will consider the growth in the business.
Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance.
The aim of all this is to consider the appropriateness of CEO pay levels.
See our latest analysis for Gear4music (Holdings)
How Does Andrew Wass’s Compensation Compare With Similar Sized Companies?
According to our data, Gear4music (Holdings) plc has a market capitalization of UK£41m, and pays its CEO total annual compensation worth UK£200k, based on the year to February 2018.
It is worth noting that the CEO compensation consists almost entirely of the salary, worth UK£195k.
We examined a group of similar sized companies, with market capitalizations of below UK£153m. The median CEO compensation in that group is UK£236k.
So Andrew Wass receives a similar amount to the median CEO pay, amongst the companies we looked at.
Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.
You can see below how CEO compensation at Gear4music (Holdings) has changed over time.
Is Gear4music (Holdings) plc Growing?
On average over the last three years, Gear4music (Holdings) plc has grown earnings per share (EPS) by 51% each year (using a line of best fit).
Its revenue is up 39% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years.
The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see.
Shareholders might be interested in this free visualization of analyst forecasts.
Has Gear4music (Holdings) plc Been A Good Investment?
Most shareholders would probably be pleased with Gear4music (Holdings) plc for providing a total return of 39% 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.
Andrew Wass is paid around the same as most CEOs of similar size companies.
Few would be critical of the leadership, since returns have been strong and earnings per share are moving in the right direction.
So one could argue the CEO compensation is quite modest, if you consider company performance!
Whatever your view on compensation, you might want to check if insiders are buying or selling Gear4music (Holdings) shares.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this freelist 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 firstname.lastname@example.org. 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.