It Looks Like Rosslyn Data Technologies plc's (LON:RDT) CEO May Expect Their Salary To Be Put Under The Microscope

Key Insights

• Rosslyn Data Technologies will host its Annual General Meeting on 23rd of November
• Total pay for CEO Paul Watts includes UK£180.0k salary
• Total compensation is similar to the industry average
• Rosslyn Data Technologies' EPS declined by 8.5% over the past three years while total shareholder loss over the past three years was 96%

The results at Rosslyn Data Technologies plc (LON:RDT) have been quite disappointing recently and CEO Paul Watts bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 23rd of November. 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. The data we present below explains why we think CEO compensation is not consistent with recent performance.

View our latest analysis for Rosslyn Data Technologies

Comparing Rosslyn Data Technologies plc's CEO Compensation With The Industry

At the time of writing, our data shows that Rosslyn Data Technologies plc has a market capitalization of UK£2.3m, and reported total annual CEO compensation of UK£199k for the year to April 2023. That's mostly flat as compared to the prior year's compensation. In particular, the salary of UK£180.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the British Software industry with market capitalizations below UK£161m, reported a median total CEO compensation of UK£259k. From this we gather that Paul Watts is paid around the median for CEOs in the industry.

Speaking on an industry level, nearly 66% of total compensation represents salary, while the remainder of 34% is other remuneration. According to our research, Rosslyn Data Technologies has allocated a higher percentage of pay to salary in comparison to the wider 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 Rosslyn Data Technologies plc's Growth Numbers

Over the last three years, Rosslyn Data Technologies plc has shrunk its earnings per share by 8.5% per year. Its revenue is up 10% over the last year.

Overall this is not a very positive result for shareholders. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for us to put aside my concerns around EPS. 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 Rosslyn Data Technologies plc Been A Good Investment?

The return of -96% over three years would not have pleased Rosslyn Data Technologies plc shareholders. This suggests it would be unwise for the company to pay the CEO too 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.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 5 warning signs for Rosslyn Data Technologies (3 are a bit concerning!) that you should be aware of before investing here.

Important note: Rosslyn Data Technologies is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.