Pete Kear became the CEO of D4t4 Solutions Plc (LON:D4T4) in 2016, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Check out our latest analysis for D4t4 Solutions
Comparing D4t4 Solutions Plc's CEO Compensation With the industry
Our data indicates that D4t4 Solutions Plc has a market capitalization of UK£116m, and total annual CEO compensation was reported as UK£385k for the year to March 2020. This means that the compensation hasn't changed much from last year. Notably, the salary which is UK£210.0k, represents most of the total compensation being paid.
On comparing similar companies from the same industry with market caps ranging from UK£73m to UK£293m, we found that the median CEO total compensation was UK£494k. This suggests that D4t4 Solutions remunerates its CEO largely in line with the industry average. Moreover, Pete Kear also holds UK£5.0m worth of D4t4 Solutions stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | UK£210k | UK£177k | 55% |
| Other | UK£175k | UK£213k | 45% |
| Total Compensation | UK£385k | UK£390k | 100% |
On an industry level, around 67% of total compensation represents salary and 33% is other remuneration. In D4t4 Solutions' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader 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.
D4t4 Solutions Plc's Growth
Over the past three years, D4t4 Solutions Plc has seen its earnings per share (EPS) grow by 14% per year. Its revenue is down 10% over the previous year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 D4t4 Solutions Plc Been A Good Investment?
We think that the total shareholder return of 139%, over three years, would leave most D4t4 Solutions Plc shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
To Conclude...
As we noted earlier, D4t4 Solutions pays its CEO in line with similar-sized companies belonging to the same industry. The company is growing EPS and total shareholder returns have been pleasing. So one could argue that CEO compensation is quite modest, if you consider company performance! Stockholders might even be okay with a bump in pay, seeing as how investor returns have been so strong.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for D4t4 Solutions 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. 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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About AIM:CLBS
Celebrus Technologies
Provides information technology products and services.
Flawless balance sheet with proven track record.
