In 2015 Rob Smith was appointed CEO of Filtronic plc (LON:FTC). First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
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How Does Rob Smith’s Compensation Compare With Similar Sized Companies?
Our data indicates that Filtronic plc is worth UK£11m, and total annual CEO compensation is UK£181k. (This figure is for the year to 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at UK£157k. We looked at a group of companies with market capitalizations under UK£155m, and the median CEO compensation was UK£245k.
That means Rob Smith receives fairly typical remuneration for the CEO of a company that size. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context. So this free visual report on analyst forecasts could hold they key to an excellent investment decision.
You can see, below, how CEO compensation at Filtronic has changed over time.
Is Filtronic plc Growing?
On average over the last three years, Filtronic plc has grown earnings per share (EPS) by 119% each year (using a line of best fit). In the last year, its revenue is down -32%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn’t ideal, but it is the bottom line that counts most in business.
Has Filtronic plc Been A Good Investment?
With a total shareholder return of 9.0% over three years, Filtronic plc has done okay by shareholders. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
In Summary…
Remuneration for Rob Smith is close enough to the median pay for a CEO of a similar sized company .
Shareholder returns could be better but shareholders would be pleased with the positive EPS growth. As a result of these considerations, I would suggest the CEO pay is reasonable. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Filtronic.
Important note: Filtronic may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.