Eckoh plc's (LON:ECK) CEO Looks Like They Deserve Their Pay Packet

The performance at Eckoh plc (LON:ECK) has been quite strong recently and CEO Nik Philpot has played a role in it. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 01 September 2021. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. Here is our take on why we think CEO compensation is not extravagant.

See our latest analysis for Eckoh

Comparing Eckoh plc's CEO Compensation With the industry

Our data indicates that Eckoh plc has a market capitalization of UK£149m, and total annual CEO compensation was reported as UK£338k for the year to March 2021. We note that's a decrease of 26% compared to last year. We note that the salary portion, which stands at UK£322.0k constitutes the majority of total compensation received by the CEO.

On comparing similar companies from the same industry with market caps ranging from UK£73m to UK£291m, we found that the median CEO total compensation was UK£425k. So it looks like Eckoh compensates Nik Philpot in line with the median for the industry. What's more, Nik Philpot holds UK£4.1m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2021	2020	Proportion (2021)
Salary	UK£322k	UK£320k	95%
Other	UK£16k	UK£134k	5%
Total Compensation	UK£338k	UK£454k	100%

On an industry level, around 60% of total compensation represents salary and 40% is other remuneration. Eckoh is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. 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.

Eckoh plc's Growth

Eckoh plc has seen its earnings per share (EPS) increase by 26% a year over the past three years. Its revenue is down 8.1% over the previous year.

Shareholders would be glad to know that the company has improved itself over the last few years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 Eckoh plc Been A Good Investment?

We think that the total shareholder return of 74%, over three years, would leave most Eckoh 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...

Eckoh pays its CEO a majority of compensation through a salary. The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 1 warning sign for Eckoh that investors should look into moving forward.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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