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Michael Edelman is the CEO of Nanoco Group plc (LON:NANO). First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Michael Edelman’s Compensation Compare With Similar Sized Companies?
According to our data, Nanoco Group plc has a market capitalization of UK£143m, and pays its CEO total annual compensation worth UK£312k. (This figure is for the year to July 2018). It is worth noting that the CEO compensation consists almost entirely of the salary, worth UK£297k. We examined companies with market caps from UK£77m to UK£309m, and discovered that the median CEO total compensation of that group was UK£500k.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. While this is a good thing, you’ll need to understand the business better before you can form an opinion.
The graphic below shows how CEO compensation at Nanoco Group has changed from year to year.
Is Nanoco Group plc Growing?
Nanoco Group plc has increased its earnings per share (EPS) by an average of 32% a year, over the last three years (using a line of best fit). It achieved revenue growth of 646% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. 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 Nanoco Group plc Been A Good Investment?
With a total shareholder return of 32% over three years, Nanoco Group plc shareholders would, in general, be reasonably content. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
Nanoco Group plc is currently paying its CEO below what is normal for companies of its size. Considering the underlying business is growing earnings, this would suggest the pay is modest. While returns over the last few years haven’t been top notch, there is nothing to suggest to us that Michael Edelman is overcompensated.
It’s great to see a company that pays its CEO reasonably, even while growing. But for me, it’s even better if insiders are also buying shares with their own cold, hard, cash. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Nanoco Group (free visualization of insider trades).
Important note: Nanoco Group may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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If you spot an error that warrants correction, please contact the editor at email@example.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.