Shareholders Will Probably Not Have Any Issues With Motorpoint Group plc's (LON:MOTR) CEO Compensation

The share price of Motorpoint Group plc (LON:MOTR) has increased significantly over the past few years. However, the earnings growth has not kept up with the share price momentum, suggesting that some other factors may be driving the price direction. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 27 July 2021. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

See our latest analysis for Motorpoint Group

How Does Total Compensation For Mark Carpenter Compare With Other Companies In The Industry?

According to our data, Motorpoint Group plc has a market capitalization of UK£317m, and paid its CEO total annual compensation worth UK£466k over the year to March 2021. That's a notable increase of 14% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at UK£231k.

In comparison with other companies in the industry with market capitalizations ranging from UK£146m to UK£585m, the reported median CEO total compensation was UK£531k. So it looks like Motorpoint Group compensates Mark Carpenter in line with the median for the industry. Moreover, Mark Carpenter also holds UK£31m worth of Motorpoint Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2021	2020	Proportion (2021)
Salary	UK£231k	UK£274k	50%
Other	UK£235k	UK£136k	50%
Total Compensation	UK£466k	UK£410k	100%

On an industry level, roughly 80% of total compensation represents salary and 20% is other remuneration. It's interesting to note that Motorpoint Group allocates a smaller portion of compensation to salary in comparison 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.

Motorpoint Group plc's Growth

Over the last three years, Motorpoint Group plc has shrunk its earnings per share by 19% per year. Its revenue is down 29% over the previous year.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Motorpoint Group plc Been A Good Investment?

Most shareholders would probably be pleased with Motorpoint Group plc for providing a total return of 57% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Although shareholders would be quite happy with the returns they have earned on their initial investment, earnings have failed to grow and this could mean returns may be hard to keep up. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 2 warning signs (and 1 which is a bit unpleasant) in Motorpoint Group we think you should know about.

Important note: Motorpoint Group is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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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