Why ZOO Digital Group's (LON:ZOO) CEO Pay Matters

This article will reflect on the compensation paid to Stuart Green who has served as CEO of ZOO Digital Group plc (LON:ZOO) since 2006. 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 ZOO Digital Group

Comparing ZOO Digital Group plc's CEO Compensation With the industry

Our data indicates that ZOO Digital Group plc has a market capitalization of UK£55m, and total annual CEO compensation was reported as US$292k for the year to March 2020. Notably, that's an increase of 21% over the year before. In particular, the salary of US$223.0k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations under UK£147m, the reported median total CEO compensation was US$310k. So it looks like ZOO Digital Group compensates Stuart Green in line with the median for the industry. Moreover, Stuart Green also holds UK£8.6m worth of ZOO Digital Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 68% of total compensation out of all the companies we analyzed, while other remuneration made up 32% of the pie. According to our research, ZOO Digital Group has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

ZOO Digital Group plc's Growth

Over the past three years, ZOO Digital Group plc has seen its earnings per share (EPS) grow by 66% per year. Its revenue is up 13% over the last year.

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. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has ZOO Digital Group plc Been A Good Investment?

ZOO Digital Group plc has generated a total shareholder return of 5.0% over three years, so most shareholders wouldn't be too disappointed. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

As we touched on above, ZOO Digital Group plc is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, it's admirable that over the last three years, EPS growth for the company has been impressive, though the same can't be said for investor returns. Considering overall performance, we'd say the compensation is fair, although stockholders will want to see higher returns moving forward.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 2 warning signs for ZOO Digital Group that investors should be aware of in a dynamic business environment.

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.

If you’re looking to trade ZOO Digital Group, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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 (at) simplywallst.com.