What We Learned About CML Microsystems' (LON:CML) CEO Compensation

Chris Gurry has been the CEO of CML Microsystems plc (LON:CML) since 2007, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for CML Microsystems.

View our latest analysis for CML Microsystems

How Does Total Compensation For Chris Gurry Compare With Other Companies In The Industry?

According to our data, CML Microsystems plc has a market capitalization of UK£61m, and paid its CEO total annual compensation worth UK£278k over the year to March 2020. That's a notable decrease of 11% on last year. Notably, the salary which is UK£224.0k, represents most of the total compensation being paid.

On comparing similar-sized companies in the industry with market capitalizations below UK£144m, we found that the median total CEO compensation was UK£225k. From this we gather that Chris Gurry is paid around the median for CEOs in the industry. Moreover, Chris Gurry also holds UK£3.4m worth of CML Microsystems stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 63% of total compensation represents salary, while the remainder of 37% is other remuneration. According to our research, CML Microsystems has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at CML Microsystems plc's Growth Numbers

Over the last three years, CML Microsystems plc has shrunk its earnings per share by 32% per year. In the last year, its revenue changed by just 0.5%.

Overall this is not a very positive result for shareholders. And the flat revenue is seriously uninspiring. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has CML Microsystems plc Been A Good Investment?

Since shareholders would have lost about 27% over three years, some CML Microsystems plc investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As previously discussed, Chris is compensated close to the median for companies of its size, and which belong to the same industry. On the other hand, EPS growth and total shareholder return have been negative for the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.

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. In our study, we found 4 warning signs for CML Microsystems you should be aware of, and 1 of them shouldn't be ignored.

Important note: CML Microsystems 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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