Shareholders May Find It Hard To Justify A Pay Rise For Seeing Machines Limited's (LON:SEE) CEO This Year

Key Insights

• Seeing Machines' Annual General Meeting to take place on 29th of November
• Total pay for CEO Paul McGlone includes US$336.4k salary
• The total compensation is similar to the average for the industry
• Seeing Machines' total shareholder return over the past three years was 3.0% while its EPS grew by 39% over the past three years

CEO Paul McGlone has done a decent job of delivering relatively good performance at Seeing Machines Limited (LON:SEE) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 29th of November. We present our case of why we think CEO compensation looks fair.

Check out our latest analysis for Seeing Machines

How Does Total Compensation For Paul McGlone Compare With Other Companies In The Industry?

Our data indicates that Seeing Machines Limited has a market capitalization of UK£225m, and total annual CEO compensation was reported as US$505k for the year to June 2023. That's a notable decrease of 10% on last year. We note that the salary portion, which stands at US$336.4k constitutes the majority of total compensation received by the CEO.

On examining similar-sized companies in the British Electronic industry with market capitalizations between UK£80m and UK£321m, we discovered that the median CEO total compensation of that group was US$572k. This suggests that Seeing Machines remunerates its CEO largely in line with the industry average. What's more, Paul McGlone holds UK£466k worth of shares in the company in their own name.

Component	2023	2022	Proportion (2023)
Salary	US$336k	US$443k	67%
Other	US$169k	US$119k	33%
Total Compensation	US$505k	US$563k	100%

On an industry level, around 76% of total compensation represents salary and 24% is other remuneration. In Seeing Machines' 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.

Seeing Machines Limited's Growth

Seeing Machines Limited has seen its earnings per share (EPS) increase by 39% a year over the past three years. Its revenue is up 48% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent 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 Seeing Machines Limited Been A Good Investment?

Seeing Machines Limited has not done too badly by shareholders, with a total return of 3.0%, over three years. It would be nice to see that metric improve in the future. Accordingly, a proposal to increase CEO remuneration without seeing an improvement in shareholder returns might not be met favorably by most shareholders.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. In saying that, any proposed increase to CEO compensation will still be assessed on how reasonable it is based on performance and industry benchmarks.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Seeing Machines that you should be aware of before investing.

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.