Does CML Microsystems plc's (LON:CML) CEO Pay Matter?

July 08, 2019

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In 2007 Chris Gurry was appointed CEO of CML Microsystems plc (LON:CML). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for CML Microsystems

How Does Chris Gurry's Compensation Compare With Similar Sized Companies?

According to our data, CML Microsystems plc has a market capitalization of UK£52m, and pays its CEO total annual compensation worth UK£315k. (This number is for the twelve months until March 2018). While we always look at total compensation first, we note that the salary component is less, at UK£214k. We examined a group of similar sized companies, with market capitalizations of below UK£160m. The median CEO total compensation in that group is UK£246k.

That means Chris Gurry receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.

You can see a visual representation of the CEO compensation at CML Microsystems, below.

Is CML Microsystems plc Growing?

Over the last three years CML Microsystems plc has grown its earnings per share (EPS) by an average of 2.5% per year (using a line of best fit). In the last year, its revenue is down -11%.

I would argue that the lack of revenue growth in the last year is less than ideal, but it is good to see EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch.

Has CML Microsystems plc Been A Good Investment?

Given the total loss of 4.0% over three years, many shareholders in CML Microsystems plc are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

Chris Gurry is paid around what is normal the leaders of comparable size companies.

The per share growth could be better, in our view. And shareholder returns have been disappointing over the last three years. So suffice it to say we don't think the compensation is modest. Whatever your view on compensation, you might want to check if insiders are buying or selling CML Microsystems shares (free trial).

If you want to buy a stock that is better than CML Microsystems, this free list of high return, low debt companies is a great place to look.

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 editorial-team@simplywallst.com. 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.

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About AIM:CML

CML Microsystems

Through its subsidiaries, designs, manufactures, and semiconductor products for industrial, professional and commercial applications in the Americas, Europe, Far East, and internationally.

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