We Discuss Why Northamber plc's (LON:NAR) CEO Will Find It Hard To Get A Pay Rise From Shareholders This Year

Key Insights

• Northamber to hold its Annual General Meeting on 20th of December
• Total pay for CEO Alex Phillips includes UK£33.0k salary
• The total compensation is 80% less than the average for the industry
• Over the past three years, Northamber's EPS fell by 147% and over the past three years, the total loss to shareholders 9.9%

The disappointing performance at Northamber plc (LON:NAR) will make some shareholders rather disheartened. The next AGM coming up on 20th of December will be a chance for shareholders to have their concerns addressed by the board, challenge management on company strategy and vote on resolutions such as executive remuneration, which may help change the company's future prospects. We think most shareholders will probably pass the CEO compensation, based on what we gathered.

View our latest analysis for Northamber

Comparing Northamber plc's CEO Compensation With The Industry

According to our data, Northamber plc has a market capitalization of UK£12m, and paid its CEO total annual compensation worth UK£50k over the year to June 2023. We note that's a decrease of 26% compared to last year. Notably, the salary which is UK£33.0k, represents most of the total compensation being paid.

In comparison with other companies in the British Electronic industry with market capitalizations under UK£160m, the reported median total CEO compensation was UK£254k. That is to say, Alex Phillips is paid under the industry median. What's more, Alex Phillips holds UK£7.6m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	UK£33k	UK£50k	66%
Other	UK£17k	UK£18k	34%
Total Compensation	UK£50k	UK£68k	100%

Speaking on an industry level, nearly 75% of total compensation represents salary, while the remainder of 25% is other remuneration. In Northamber's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. 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 Northamber plc's Growth Numbers

Over the last three years, Northamber plc has shrunk its earnings per share by 147% per year. Its revenue is up 1.3% over the last year.

Few shareholders would be pleased to read that EPS have declined. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Northamber plc Been A Good Investment?

With a three year total loss of 9.9% for the shareholders, Northamber plc would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 2 warning signs (and 1 which doesn't sit too well with us) in Northamber we think you should know about.

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. 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.