We Think DeepMatter Group Plc's (LON:DMTR) CEO Compensation Package Needs To Be Put Under A Microscope

The results at DeepMatter Group Plc (LON:DMTR) have been quite disappointing recently and CEO Mark Warne bears some responsibility for this. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 30 June 2021. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. The data we present below explains why we think CEO compensation is not consistent with recent performance.

View our latest analysis for DeepMatter Group

How Does Total Compensation For Mark Warne Compare With Other Companies In The Industry?

According to our data, DeepMatter Group Plc has a market capitalization of UK£16m, and paid its CEO total annual compensation worth UK£182k over the year to December 2020. Notably, that's an increase of 15% over the year before. Notably, the salary which is UK£175.0k, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below UK£144m, reported a median total CEO compensation of UK£243k. So it looks like DeepMatter Group compensates Mark Warne in line with the median for the industry. Moreover, Mark Warne also holds UK£68k worth of DeepMatter Group stock directly under their own name.

Talking in terms of the industry, salary represented approximately 69% of total compensation out of all the companies we analyzed, while other remuneration made up 31% of the pie. DeepMatter Group pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

DeepMatter Group Plc's Growth

DeepMatter Group Plc has reduced its earnings per share by 4.8% a year over the last three years. In the last year, its revenue is up 10%.

Overall this is not a very positive result for shareholders. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that EPS has gone backwards over three years. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has DeepMatter Group Plc Been A Good Investment?

Few DeepMatter Group Plc shareholders would feel satisfied with the return of -51% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Mark receives almost all of their compensation through a salary. Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 5 warning signs for DeepMatter Group (of which 1 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from DeepMatter Group, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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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