Shareholders Will Probably Not Have Any Issues With FDM Group (Holdings) plc's (LON:FDM) CEO Compensation

Despite FDM Group (Holdings) plc's (LON:FDM) share price growing positively in the past few years, the per-share earnings growth has not grown to investors' expectations, suggesting that there could be other factors at play driving the share price. Some of these issues will occupy shareholders' minds as the AGM rolls around on 28 April 2021. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

See our latest analysis for FDM Group (Holdings)

Comparing FDM Group (Holdings) plc's CEO Compensation With the industry

According to our data, FDM Group (Holdings) plc has a market capitalization of UK£1.2b, and paid its CEO total annual compensation worth UK£751k over the year to December 2020. That's slightly lower by 6.4% over the previous year. We note that the salary of UK£404.3k makes up a sizeable portion of the total compensation received by the CEO.

On examining similar-sized companies in the industry with market capitalizations between UK£717m and UK£2.3b, we discovered that the median CEO total compensation of that group was UK£636k. This suggests that FDM Group (Holdings) remunerates its CEO largely in line with the industry average. Furthermore, Rod Flavell directly owns UK£86m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2020	2019	Proportion (2020)
Salary	UK£404k	UK£404k	54%
Other	UK£346k	UK£398k	46%
Total Compensation	UK£751k	UK£802k	100%

Speaking on an industry level, nearly 67% of total compensation represents salary, while the remainder of 33% is other remuneration. In FDM Group (Holdings)'s case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at FDM Group (Holdings) plc's Growth Numbers

Over the last three years, FDM Group (Holdings) plc has shrunk its earnings per share by 1.8% per year. It saw its revenue drop 1.4% over the last year.

A lack of EPS improvement is not good to see. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has FDM Group (Holdings) plc Been A Good Investment?

FDM Group (Holdings) plc has generated a total shareholder return of 17% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

Shareholder returns, while positive, should be looked at along with earnings, which have not grown at all recently. This makes us think the share price momentum may slow in the future. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for FDM Group (Holdings) that you should be aware of before investing.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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