Avi Hartmann has been the CEO of Starcom plc (LON:STAR) since 2000, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Check out our latest analysis for Starcom
How Does Total Compensation For Avi Hartmann Compare With Other Companies In The Industry?
At the time of writing, our data shows that Starcom plc has a market capitalization of UK£3.3m, and reported total annual CEO compensation of US$181k for the year to December 2019. We note that's a small decrease of 4.2% on last year. In particular, the salary of US$167.0k, makes up a huge portion of the total compensation being paid to the CEO.
On comparing similar-sized companies in the industry with market capitalizations below UK£151m, we found that the median total CEO compensation was US$316k. That is to say, Avi Hartmann is paid under the industry median. Furthermore, Avi Hartmann directly owns UK£230k worth of shares in the company.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | US$167k | US$176k | 92% |
| Other | US$14k | US$13k | 8% |
| Total Compensation | US$181k | US$189k | 100% |
On an industry level, roughly 67% of total compensation represents salary and 33% is other remuneration. It's interesting to note that Starcom pays out a greater portion of remuneration through salary, compared to the industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Starcom plc's Growth
Starcom plc has seen its earnings per share (EPS) increase by 55% a year over the past three years. The trailing twelve months of revenue was pretty much the same as the prior period.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Starcom plc Been A Good Investment?
Since shareholders would have lost about 53% over three years, some Starcom plc investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
As we touched on above, Starcom plc is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Importantly though, the company has impressed with its EPS growth over three years. It's tough to criticize CEO compensation when the per-share EPS movement is positive. But shareholders will likely want to hold off on any raise for Avi until investor returns are positive.
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. That's why we did our research, and identified 3 warning signs for Starcom (of which 2 don't sit too well with us!) 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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About AIM:TRAC
t42 IoT Tracking Solutions
A technology company, engages in sales of hardware and software products in the United Kingdom.
Moderate and slightly overvalued.
