Why We Think t42 IoT Tracking Solutions PLC's (LON:TRAC) CEO Compensation Is Not Excessive At All

Key Insights

• t42 IoT Tracking Solutions' Annual General Meeting to take place on 14th of November
• CEO Avi Hartmann's total compensation includes salary of US$186.0k
• Total compensation is 37% below industry average
• t42 IoT Tracking Solutions' three-year loss to shareholders was 71% while its EPS grew by 9.9% over the past three years

The performance at t42 IoT Tracking Solutions PLC (LON:TRAC) has been rather lacklustre of late and shareholders may be wondering what CEO Avi Hartmann is planning to do about this. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 14th of November. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. In our opinion, CEO compensation does not look excessive and we discuss why.

Check out our latest analysis for t42 IoT Tracking Solutions

Comparing t42 IoT Tracking Solutions PLC's CEO Compensation With The Industry

According to our data, t42 IoT Tracking Solutions PLC has a market capitalization of UK£1.2m, and paid its CEO total annual compensation worth US$200k over the year to December 2022. We note that's a small decrease of 3.8% on last year. We note that the salary portion, which stands at US$186.0k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the British Software industry with market capitalizations under UK£163m, the reported median total CEO compensation was US$318k. Accordingly, t42 IoT Tracking Solutions pays its CEO under the industry median. Furthermore, Avi Hartmann directly owns UK£126k worth of shares in the company.

Component	2022	2021	Proportion (2022)
Salary	US$186k	US$193k	93%
Other	US$14k	US$15k	7%
Total Compensation	US$200k	US$208k	100%

On an industry level, around 66% of total compensation represents salary and 34% is other remuneration. t42 IoT Tracking Solutions pays out 93% 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.

t42 IoT Tracking Solutions PLC's Growth

Over the past three years, t42 IoT Tracking Solutions PLC has seen its earnings per share (EPS) grow by 9.9% per year. In the last year, its revenue is down 13%.

We generally like to see a little revenue growth, but it is good to see a modest EPS growth at least. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 t42 IoT Tracking Solutions PLC Been A Good Investment?

The return of -71% over three years would not have pleased t42 IoT Tracking Solutions PLC shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

The fact that shareholders have earned a negative share price return is certainly disconcerting. Perhaps the poor price performance may have something to do with the the fact that earnings per share growth has not been performing as strongly either. In the upcoming AGM, shareholders will get the opportunity to discuss these concerns with the board and assess if the board's plan is likely to improve company performance.

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 6 warning signs for t42 IoT Tracking Solutions (of which 3 are potentially serious!) that you should know about in order to have a holistic understanding of the stock.

Important note: t42 IoT Tracking Solutions 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.

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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.