Shareholders Would Not Be Objecting To Pebble Beach Systems Group plc's (LON:PEB) CEO Compensation And Here's Why

It would be hard to discount the role that CEO Peter Mayhead has played in delivering the impressive results at Pebble Beach Systems Group plc (LON:PEB) recently. Coming up to the next AGM on 23 June 2021, shareholders would be keeping this in mind. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

See our latest analysis for Pebble Beach Systems Group

How Does Total Compensation For Peter Mayhead Compare With Other Companies In The Industry?

Our data indicates that Pebble Beach Systems Group plc has a market capitalization of UK£14m, and total annual CEO compensation was reported as UK£197k for the year to December 2020. We note that's a decrease of 35% compared to last year. In particular, the salary of UK£168.0k, 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£142m, reported a median total CEO compensation of UK£232k. This suggests that Pebble Beach Systems Group remunerates its CEO largely in line with the industry average.

Component	2020	2019	Proportion (2020)
Salary	UK£168k	UK£168k	85%
Other	UK£29k	UK£136k	15%
Total Compensation	UK£197k	UK£304k	100%

On an industry level, around 71% of total compensation represents salary and 29% is other remuneration. Pebble Beach Systems Group is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Pebble Beach Systems Group plc's Growth Numbers

Over the past three years, Pebble Beach Systems Group plc has seen its earnings per share (EPS) grow by 103% per year. In the last year, its revenue is down 25%.

Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. 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 Pebble Beach Systems Group plc Been A Good Investment?

Most shareholders would probably be pleased with Pebble Beach Systems Group plc for providing a total return of 264% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

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. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 3 warning signs for Pebble Beach Systems Group (of which 1 is a bit unpleasant!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Pebble Beach Systems Group, 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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