Stock Analysis

Here's What We Learned About The CEO Pay At Oxford Metrics plc (LON:OMG)

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AIM:OMG
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Nick Bolton has been the CEO of Oxford Metrics plc (LON:OMG) since 2005, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Oxford Metrics pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Oxford Metrics

How Does Total Compensation For Nick Bolton Compare With Other Companies In The Industry?

According to our data, Oxford Metrics plc has a market capitalization of UK£119m, and paid its CEO total annual compensation worth UK£395k over the year to September 2020. Notably, that's an increase of 30% over the year before. Notably, the salary which is UK£297.0k, represents most of the total compensation being paid.

On comparing similar companies from the same industry with market caps ranging from UK£73m to UK£293m, we found that the median CEO total compensation was UK£421k. From this we gather that Nick Bolton is paid around the median for CEOs in the industry. What's more, Nick Bolton holds UK£2.3m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20202019Proportion (2020)
Salary UK£297k UK£261k 75%
Other UK£98k UK£44k 25%
Total CompensationUK£395k UK£305k100%

On an industry level, around 67% of total compensation represents salary and 33% is other remuneration. According to our research, Oxford Metrics has allocated a higher percentage of pay to salary in comparison to the wider industry. 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.

ceo-compensation
AIM:OMG CEO Compensation January 4th 2021

A Look at Oxford Metrics plc's Growth Numbers

Over the last three years, Oxford Metrics plc has shrunk its earnings per share by 21% per year. Its revenue is down 14% over the previous year.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Oxford Metrics plc Been A Good Investment?

Most shareholders would probably be pleased with Oxford Metrics plc for providing a total return of 67% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

As previously discussed, Nick is compensated close to the median for companies of its size, and which belong to the same industry. Some investors may take issue with this, especially considering shrinking EPS for the past three years. But on the bright side, shareholder returns have moved northward during the same period. We wouldn't say CEO compensation is too high, but shareholders will probably want to see an increase in EPS before agreeing the business should pay any more.

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. We identified 3 warning signs for Oxford Metrics (1 can't be ignored!) that you should be aware of before investing here.

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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