What We Learned About Midwich Group's (LON:MIDW) CEO Pay

This article will reflect on the compensation paid to Stephen Fenby who has served as CEO of Midwich Group Plc (LON:MIDW) since 2010. This analysis will also assess whether Midwich Group pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

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£411m, and reported total annual CEO compensation of UK£401k for the year to December 2019. That's a slight decrease of 4.5% on the prior year. Notably, the salary which is UK£315.0k, represents most of the total compensation being paid.

On comparing similar companies from the same industry with market caps ranging from UK£150m to UK£601m, we found that the median CEO total compensation was UK£709k. In other words, Midwich Group pays its CEO lower than the industry median. Furthermore, Stephen Fenby directly owns UK£97m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, roughly 70% of total compensation represents salary and 30% is other remuneration. Midwich Group is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Midwich Group Plc's Growth

Midwich Group Plc has reduced its earnings per share by 22% a year over the last three years. It achieved revenue growth of 7.8% over the last year.

The decline in EPS is a bit concerning. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Midwich Group Plc Been A Good Investment?

With a three year total loss of 3.8% for the shareholders, Midwich Group Plc would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

As previously discussed, Stephen is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. EPS growth has failed to impress us, and the same can be said about shareholder returns. It's tough to say that Stephen is earning a very high compensation, but shareholders will likely want to see healthier investor returns before agreeing that a raise is in order.

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. We did our research and spotted 4 warning signs for Midwich Group that investors should look into moving forward.

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. 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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