Should Shareholders Reconsider Newmark Security plc's (LON:NWT) CEO Compensation Package?

Key Insights

• Newmark Security's Annual General Meeting to take place on 28th of February
• Total pay for CEO Marie-Claire Dwek includes UK£208.0k salary
• Total compensation is similar to the industry average
• Newmark Security's three-year loss to shareholders was 38% while its EPS was down 20% over the past three years

The results at Newmark Security plc (LON:NWT) have been quite disappointing recently and CEO Marie-Claire Dwek bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 28th of February. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. The data we present below explains why we think CEO compensation is not consistent with recent performance.

View our latest analysis for Newmark Security

Comparing Newmark Security plc's CEO Compensation With The Industry

Our data indicates that Newmark Security plc has a market capitalization of UK£4.2m, and total annual CEO compensation was reported as UK£260k for the year to April 2022. We note that's a decrease of 23% compared to last year. We note that the salary portion, which stands at UK£208.0k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the British Electronic industry with market capitalizations below UK£165m, reported a median total CEO compensation of UK£259k. So it looks like Newmark Security compensates Marie-Claire Dwek in line with the median for the industry.

Speaking on an industry level, nearly 74% of total compensation represents salary, while the remainder of 26% is other remuneration. There isn't a significant difference between Newmark Security 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 Newmark Security plc's Growth Numbers

Over the last three years, Newmark Security plc has shrunk its earnings per share by 20% per year. It achieved revenue growth of 2.9% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Newmark Security plc Been A Good Investment?

The return of -38% over three years would not have pleased Newmark Security plc 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, the board will get the chance to explain the steps it plans to take to improve business performance.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 3 warning signs for Newmark Security (2 are concerning!) that you should be aware of before investing here.

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.