Is Eckoh plc (LON:ECK) Overpaying Its CEO?

Nik Philpot became the CEO of Eckoh plc (LON:ECK) in 2006. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for Eckoh

How Does Nik Philpot’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Eckoh plc has a market cap of UK£102m, and is paying total annual CEO compensation of UK£313k. (This number is for the twelve months until March 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at UK£283k. We looked at a group of companies with market capitalizations under UK£154m, and the median CEO total compensation was UK£239k.

As you can see, Nik Philpot is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Eckoh 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 a visual representation of the CEO compensation at Eckoh, below.

AIM:ECK CEO Compensation, April 22nd 2019
AIM:ECK CEO Compensation, April 22nd 2019

Is Eckoh plc Growing?

Over the last three years Eckoh plc has grown its earnings per share (EPS) by an average of 37% per year (using a line of best fit). Its revenue is up 2.5% over last year.

This demonstrates that the company has been improving recently. A good result. It’s nice to see a little revenue growth, as this is consistent with healthy business conditions. It could be important to check this free visual depiction of what analysts expect for the future.

Has Eckoh plc Been A Good Investment?

With a three year total loss of 15%, Eckoh plc would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary…

We examined the amount Eckoh plc pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. While EPS is positive, we’d say shareholders would want better returns before the CEO is paid much more. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Eckoh.

If you want to buy a stock that is better than Eckoh, this free list of high return, low debt companies is a great place to look.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.