Our View On Cerillion's (LON:CER) CEO Pay

The CEO of Cerillion Plc (LON:CER) is Louis Hall, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Cerillion pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Cerillion

How Does Total Compensation For Louis Hall Compare With Other Companies In The Industry?

At the time of writing, our data shows that Cerillion Plc has a market capitalization of UK£122m, and reported total annual CEO compensation of UK£588k for the year to September 2020. Notably, that's an increase of 10% over the year before. Notably, the salary which is UK£301.8k, represents most of the total compensation being paid.

For comparison, other companies in the same industry with market capitalizations ranging between UK£73m and UK£291m had a median total CEO compensation of UK£395k. Accordingly, our analysis reveals that Cerillion Plc pays Louis Hall north of the industry median. Furthermore, Louis Hall directly owns UK£37m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, around 68% of total compensation represents salary and 32% is other remuneration. Cerillion sets aside a smaller share of compensation for salary, in comparison to the overall industry. 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.

Cerillion Plc's Growth

Cerillion Plc has seen its earnings per share (EPS) increase by 8.9% a year over the past three years. Its revenue is up 11% over the last year.

This revenue growth could really point to a brighter future. And the modest growth in EPS isn't bad, either. So while we'd stop just short of calling this a top performer, but we think it is well worth watching. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Cerillion Plc Been A Good Investment?

We think that the total shareholder return of 204%, over three years, would leave most Cerillion Plc shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

As we touched on above, Cerillion Plc is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But shareholder returns have been positive for the last three years. That's why we were hoping EPS growth would match this growth, but sadly that is not the case. We'd ideally want to see higher EPS growth, but CEO compensation seems to be within reason, given high shareholder returns.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Cerillion that you should be aware of before investing.

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. 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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