We Think Some Shareholders May Hesitate To Increase Altitude Group plc's (LON:ALT) CEO Compensation

Key Insights

• Altitude Group will host its Annual General Meeting on 14th of September
• Total pay for CEO Nikki Stella includes UK£263.0k salary
• The total compensation is 55% higher than the average for the industry
• Over the past three years, Altitude Group's EPS grew by 132% and over the past three years, the total shareholder return was 234%

CEO Nikki Stella has done a decent job of delivering relatively good performance at Altitude Group plc (LON:ALT) recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 14th of September. However, some shareholders may still want to keep CEO compensation within reason.

See our latest analysis for Altitude Group

Comparing Altitude Group plc's CEO Compensation With The Industry

At the time of writing, our data shows that Altitude Group plc has a market capitalization of UK£36m, and reported total annual CEO compensation of UK£414k for the year to March 2023. Notably, that's an increase of 34% over the year before. In particular, the salary of UK£263.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the British Software industry with market capitalizations below UK£160m, reported a median total CEO compensation of UK£267k. Accordingly, our analysis reveals that Altitude Group plc pays Nikki Stella north of the industry median. Furthermore, Nikki Stella directly owns UK£520k worth of shares in the company.

Component	2023	2022	Proportion (2023)
Salary	UK£263k	UK£242k	64%
Other	UK£151k	UK£67k	36%
Total Compensation	UK£414k	UK£309k	100%

On an industry level, around 66% of total compensation represents salary and 34% is other remuneration. There isn't a significant difference between Altitude Group and the broader market, in terms of salary allocation in the overall compensation package. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Altitude Group plc's Growth

Altitude Group plc's earnings per share (EPS) grew 132% per year over the last three years. It achieved revenue growth of 57% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Altitude Group plc Been A Good Investment?

Boasting a total shareholder return of 234% over three years, Altitude Group plc has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 2 warning signs for Altitude Group that investors should be aware of in a dynamic business environment.

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.