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What We Learned About SysGroup's (LON:SYS) CEO Compensation
Adam Binks has been the CEO of SysGroup plc (LON:SYS) since 2018, 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 SysGroup.
View our latest analysis for SysGroup
Comparing SysGroup plc's CEO Compensation With the industry
Our data indicates that SysGroup plc has a market capitalization of UK£17m, and total annual CEO compensation was reported as UK£250k for the year to March 2020. That is, the compensation was roughly the same as last year. In particular, the salary of UK£165.0k, 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£149m, we found that the median total CEO compensation was UK£253k. From this we gather that Adam Binks is paid around the median for CEOs in the industry. Moreover, Adam Binks also holds UK£75k worth of SysGroup stock directly under their own name.
On an industry level, around 69% of total compensation represents salary and 31% is other remuneration. Although there is a difference in how total compensation is set, SysGroup more or less reflects the market in terms of setting the salary. 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.
SysGroup plc's Growth
SysGroup plc's earnings per share (EPS) grew 25% per year over the last three years. In the last year, its revenue is up 18%.
Shareholders would be glad to know that the company has improved itself over the last few years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. 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 SysGroup plc Been A Good Investment?
Since shareholders would have lost about 6.8% over three years, some SysGroup 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 noted earlier, SysGroup pays its CEO in line with similar-sized companies belonging to the same industry. At the same time, the company has logged negative shareholder returns over the last three years. But EPS growth is moving in a favorable direction, certainly a positive sign. It's tough for us to say CEO compensation is too generous when EPS growth is positive, but negative investor returns will irk shareholders and reduce any chances of a raise.
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 SysGroup that investors should think about before committing capital to this stock.
Switching gears from SysGroup, 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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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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.
About AIM:SYS
SysGroup
Provides managed information technology services specializing in the delivery of cloud, data, and security services to power AI and ML transformation in the United Kingdom and internationally.
Excellent balance sheet and fair value.
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