We Think Shareholders Are Less Likely To Approve A Large Pay Rise For 7digital Group plc's (LON:7DIG) CEO For Now

Under the guidance of CEO Paul Langworthy, 7digital Group plc (LON:7DIG) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 21 December 2022. However, some shareholders may still want to keep CEO compensation within reason.

See our latest analysis for 7digital Group

How Does Total Compensation For Paul Langworthy Compare With Other Companies In The Industry?

According to our data, 7digital Group plc has a market capitalization of UK£10m, and paid its CEO total annual compensation worth UK£407k over the year to December 2021. That's a notable increase of 14% on last year. Notably, the salary which is UK£240.0k, represents a considerable chunk of the total compensation being paid.

On comparing similar-sized companies in the British Software industry with market capitalizations below UK£161m, we found that the median total CEO compensation was UK£252k. This suggests that Paul Langworthy is paid more than the median for the industry.

Component	2021	2020	Proportion (2021)
Salary	UK£240k	UK£240k	59%
Other	UK£167k	UK£118k	41%
Total Compensation	UK£407k	UK£358k	100%

Talking in terms of the industry, salary represented approximately 63% of total compensation out of all the companies we analyzed, while other remuneration made up 37% of the pie. 7digital Group is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at 7digital Group plc's Growth Numbers

7digital Group plc has seen its earnings per share (EPS) increase by 104% a year over the past three years. Its revenue is up 11% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has 7digital Group plc Been A Good Investment?

We think that the total shareholder return of 127%, over three years, would leave most 7digital Group plc shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 4 warning signs (and 3 which are potentially serious) in 7digital Group we think you should know about.

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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.