Shareholders May Be Wary Of Increasing Ingenta plc's (LON:ING) CEO Compensation Package

Ingenta plc (LON:ING) has not performed well recently and CEO Gregory Winner will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around 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. We present the case why we think CEO compensation is out of sync with company performance.

See our latest analysis for Ingenta

Comparing Ingenta plc's CEO Compensation With the industry

Our data indicates that Ingenta plc has a market capitalization of UK£11m, and total annual CEO compensation was reported as UK£228k for the year to December 2020. This means that the compensation hasn't changed much from last year. In particular, the salary of UK£200.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below UK£143m, reported a median total CEO compensation of UK£239k. From this we gather that Gregory Winner is paid around the median for CEOs in the industry.

Component	2020	2019	Proportion (2020)
Salary	UK£200k	UK£200k	88%
Other	UK£28k	UK£26k	12%
Total Compensation	UK£228k	UK£226k	100%

On an industry level, around 66% of total compensation represents salary and 34% is other remuneration. Ingenta is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Ingenta plc's Growth Numbers

Ingenta plc has reduced its earnings per share by 35% a year over the last three years. It saw its revenue drop 6.8% over the last year.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Ingenta plc Been A Good Investment?

With a total shareholder return of -48% over three years, Ingenta plc shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

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. That's why we did some digging and identified 3 warning signs for Ingenta that investors should think about before committing capital to this stock.

Switching gears from Ingenta, 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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