Milan Patel has been the CEO of dotdigital Group Plc (LON:DOTD) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
View our latest analysis for dotdigital Group
Comparing dotdigital Group Plc's CEO Compensation With the industry
Our data indicates that dotdigital Group Plc has a market capitalization of UK£471m, and total annual CEO compensation was reported as UK£761k for the year to June 2020. That's mostly flat as compared to the prior year's compensation. While we always look at total compensation first, our analysis shows that the salary component is less, at UK£310k.
On examining similar-sized companies in the industry with market capitalizations between UK£296m and UK£1.2b, we discovered that the median CEO total compensation of that group was UK£412k. Accordingly, our analysis reveals that dotdigital Group Plc pays Milan Patel north of the industry median. Moreover, Milan Patel also holds UK£2.6m worth of dotdigital Group 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£310k | UK£285k | 41% |
| Other | UK£451k | UK£465k | 59% |
| Total Compensation | UK£761k | UK£750k | 100% |
Speaking on an industry level, nearly 68% of total compensation represents salary, while the remainder of 32% is other remuneration. It's interesting to note that dotdigital Group allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
dotdigital Group Plc's Growth
dotdigital Group Plc's earnings per share (EPS) grew 14% per year over the last three years. It achieved revenue growth of 11% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing 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 dotdigital Group Plc Been A Good Investment?
We think that the total shareholder return of 71%, over three years, would leave most dotdigital Group Plc shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
In Summary...
As previously discussed, Milan is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Importantly though, EPS growth and shareholder returns are very impressive over the last three years. So, in acknowledgment of the overall excellent performance, we believe CEO compensation is appropriate. And given most shareholders are probably very happy with recent returns, they might even think that Milan deserves a raise!
If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at dotdigital Group.
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:DOTD
dotdigital Group
Engages in the provision of intuitive software as a service (SaaS) and managed services to digital marketing professionals worldwide.
Flawless balance sheet, undervalued and pays a dividend.
