Our View On GoCo Group's (LON:GOCO) CEO Pay

The CEO of GoCo Group plc (LON:GOCO) is Matthew Crummack, and this article examines 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 GoCo Group

Comparing GoCo Group plc's CEO Compensation With the industry

At the time of writing, our data shows that GoCo Group plc has a market capitalization of UK£449m, and reported total annual CEO compensation of UK£1.1m for the year to December 2019. That's a notable decrease of 22% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at UK£450k.

For comparison, other companies in the same industry with market capitalizations ranging between UK£153m and UK£613m had a median total CEO compensation of UK£579k. Hence, we can conclude that Matthew Crummack is remunerated higher than the industry median. What's more, Matthew Crummack holds UK£115k worth of shares in the company in their own name.

Talking in terms of the industry, salary represented approximately 69% of total compensation out of all the companies we analyzed, while other remuneration made up 31% of the pie. GoCo Group sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at GoCo Group plc's Growth Numbers

Over the last three years, GoCo Group plc has shrunk its earnings per share by 11% per year. It achieved revenue growth of 4.2% over the last year.

Overall this is not a very positive result for shareholders. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has GoCo Group plc Been A Good Investment?

GoCo Group plc has generated a total shareholder return of 15% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

As we touched on above, GoCo Group plc is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. This doesn't look great when you realize that the company has been suffering from negative EPS growth for the last three years. While shareholder returns are acceptable, they don't delight. So you may want to delve deeper, because we don't think the amount Matthew makes is justifiable.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 2 warning signs for GoCo Group that investors should be aware of in a dynamic business environment.

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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