Peter Kear has been the CEO of D4t4 Solutions Plc (LON:D4T4) since 2016. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Peter Kear's Compensation Compare With Similar Sized Companies?
According to our data, D4t4 Solutions Plc has a market capitalization of UK£85m, and pays its CEO total annual compensation worth UK£328k. (This number is for the twelve months until March 2018). While we always look at total compensation first, we note that the salary component is less, at UK£157k. We took a group of companies with market capitalizations below UK£152m, and calculated the median CEO compensation to be UK£234k.
As you can see, Peter Kear is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean D4t4 Solutions Plc is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at D4t4 Solutions has changed over time.
Is D4t4 Solutions Plc Growing?
On average over the last three years, D4t4 Solutions Plc has grown earnings per share (EPS) by 25% each year (using a line of best fit). In the last year, its revenue is up 137%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. 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 D4t4 Solutions Plc Been A Good Investment?
Boasting a total shareholder return of 68% over three years, D4t4 Solutions 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.
We compared the total CEO remuneration paid by D4t4 Solutions Plc, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
However we must not forget that the EPS growth has been very strong over three years. Even better, returns to shareholders have been plentiful, over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. So you may want to check if insiders are buying D4t4 Solutions shares with their own money (free access).
Important note: D4t4 Solutions 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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