How Is Pelatro's (LON:PTRO) CEO Compensated?

The CEO of Pelatro Plc (LON:PTRO) is Subash Menon, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Pelatro.

See our latest analysis for Pelatro

Comparing Pelatro Plc's CEO Compensation With the industry

At the time of writing, our data shows that Pelatro Plc has a market capitalization of UK£14m, and reported total annual CEO compensation of US$262k for the year to December 2019. Notably, that's an increase of 17% over the year before. In particular, the salary of US$189.0k, 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£147m, reported a median total CEO compensation of US$343k. So it looks like Pelatro compensates Subash Menon in line with the median for the industry. Furthermore, Subash Menon directly owns UK£3.5m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 68% of total compensation represents salary, while the remainder of 32% is other remuneration. There isn't a significant difference between Pelatro and the broader market, in terms of salary allocation in the overall compensation package. 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.

A Look at Pelatro Plc's Growth Numbers

Over the last three years, Pelatro Plc has shrunk its earnings per share by 37% per year. Its revenue is down 3.4% over the previous year.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Pelatro Plc Been A Good Investment?

With a three year total loss of 44% for the shareholders, Pelatro Plc would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

As previously discussed, Subash is compensated close to the median for companies of its size, and which belong to the same industry. On the other hand, EPS growth and total shareholder return have been negative for the last three years. We'd stop short of saying compensation is inappropriate, but we would understand if shareholders had questions regarding a future raise.

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 5 warning signs for Pelatro (of which 1 makes us a bit uncomfortable!) that you should know about in order to have a holistic understanding of the stock.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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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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