Why We Think The CEO Of SDI Group plc (LON:SDI) May Soon See A Pay Rise
Shareholders will be pleased by the impressive results for SDI Group plc (LON:SDI) recently and CEO Mike Creedon has played a key role. At the upcoming AGM on 22 September 2021, they will get a chance to hear the board review the company results, discuss future strategy and cast their vote on any resolutions such as executive remuneration. We think the CEO has done a pretty decent job and probably deserves a well-earned pay rise.
View our latest analysis for SDI Group
Comparing SDI Group plc's CEO Compensation With the industry
Our data indicates that SDI Group plc has a market capitalization of UK£201m, and total annual CEO compensation was reported as UK£206k for the year to April 2021. Notably, that's a decrease of 13% over the year before. Notably, the salary which is UK£146.0k, represents most of the total compensation being paid.
On comparing similar companies from the same industry with market caps ranging from UK£72m to UK£289m, we found that the median CEO total compensation was UK£329k. This suggests that Mike Creedon is paid below the industry median. Furthermore, Mike Creedon directly owns UK£898k worth of shares in the company, implying that they are deeply invested in the company's success.
| Component | 2021 | 2020 | Proportion (2021) |
| Salary | UK£146k | UK£141k | 71% |
| Other | UK£60k | UK£95k | 29% |
| Total Compensation | UK£206k | UK£236k | 100% |
On an industry level, roughly 80% of total compensation represents salary and 20% is other remuneration. It's interesting to note that SDI Group allocates a smaller portion of compensation to salary 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 SDI Group plc's Growth Numbers
SDI Group plc's earnings per share (EPS) grew 39% per year over the last three years. Its revenue is up 43% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has SDI Group plc Been A Good Investment?
We think that the total shareholder return of 411%, over three years, would leave most SDI Group plc shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.
CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for SDI Group that investors should look into moving forward.
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.
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About AIM:SDI
SDI Group
Through its subsidiaries, designs and manufactures scientific and technology products based on digital imaging and sensing and control applications worldwide.
Undervalued with solid track record.
