Osman Abdullah has been the CEO of Petards Group plc (LON:PEG) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Petards Group.
View our latest analysis for Petards Group
Comparing Petards Group plc's CEO Compensation With the industry
At the time of writing, our data shows that Petards Group plc has a market capitalization of UK£4.9m, and reported total annual CEO compensation of UK£155k for the year to December 2019. We note that's an increase of 40% above last year. We note that the salary portion, which stands at UK£130.0k constitutes the majority of total compensation received by the CEO.
In comparison with other companies in the industry with market capitalizations under UK£150m, the reported median total CEO compensation was UK£239k. That is to say, Osman Abdullah is paid under the industry median. Furthermore, Osman Abdullah directly owns UK£182k worth of shares in the company.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | UK£130k | UK£111k | 84% |
| Other | UK£25k | - | 16% |
| Total Compensation | UK£155k | UK£111k | 100% |
On an industry level, around 66% of total compensation represents salary and 34% is other remuneration. Petards Group pays out 84% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at Petards Group plc's Growth Numbers
Petards Group plc has reduced its earnings per share by 96% a year over the last three years. In the last year, its revenue is down 27%.
Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Petards Group plc Been A Good Investment?
Given the total shareholder loss of 56% over three years, many shareholders in Petards Group plc are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
As we touched on above, Petards Group plc is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Over the last three years, shareholder returns have been downright disappointing, and EPSgrowth has been equally disappointing. It's tough to say that Osman is earning a very high compensation, but shareholders will likely want to see healthier investor returns before agreeing that a raise is in order.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Petards Group that investors should think about before committing capital to this stock.
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. 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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About AIM:PEG
Petards Group
Engages in the development, supply, and maintenance of technologies used in advanced security, surveillance, and ruggedized electronic applications in the United Kingdom, Continental Europe, and internationally.
Fair value with mediocre balance sheet.
