Shareholders May Be A Bit More Conservative With Midwich Group plc's (LON:MIDW) CEO Compensation For Now

Key Insights

• Midwich Group will host its Annual General Meeting on 13th of May
• Total pay for CEO Stephen Fenby includes UK£373.0k salary
• Total compensation is similar to the industry average
• Midwich Group's three-year loss to shareholders was 61% while its EPS grew by 3.4% over the past three years

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In the past three years, the share price of Midwich Group plc (LON:MIDW) has struggled to grow and now shareholders are sitting on a loss. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. The AGM coming up on the 13th of May could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

View our latest analysis for Midwich Group

Comparing Midwich Group plc's CEO Compensation With The Industry

At the time of writing, our data shows that Midwich Group plc has a market capitalization of UK£205m, and reported total annual CEO compensation of UK£475k for the year to December 2024. Notably, that's a decrease of 31% over the year before. In particular, the salary of UK£373.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the British Electronic industry with market capitalizations ranging between UK£75m and UK£301m had a median total CEO compensation of UK£456k. So it looks like Midwich Group compensates Stephen Fenby in line with the median for the industry. Furthermore, Stephen Fenby directly owns UK£38m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 84% of total compensation represents salary, while the remainder of 16% is other remuneration. There isn't a significant difference between Midwich Group and the broader market, in terms of salary allocation in the overall compensation package. 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.

A Look at Midwich Group plc's Growth Numbers

Over the past three years, Midwich Group plc has seen its earnings per share (EPS) grow by 3.4% per year. In the last year, its revenue is up 1.7%.

We would argue that the improvement in revenue is good, but isn't particularly impressive, but the modest improvement in EPS is good. Considering these factors we'd say performance has been pretty decent, though not amazing. 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 Midwich Group plc Been A Good Investment?

The return of -61% over three years would not have pleased Midwich Group plc shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 3 warning signs (and 1 which can't be ignored) in Midwich Group we think you should know about.

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.

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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.