This article will reflect on the compensation paid to Paul Webb who has served as CEO of Synectics plc (LON:SNX) since 2015. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Synectics.
Comparing Synectics plc's CEO Compensation With the industry
According to our data, Synectics plc has a market capitalization of UK£18m, and paid its CEO total annual compensation worth UK£347k over the year to November 2019. We note that's a decrease of 10% compared to last year. We note that the salary portion, which stands at UK£242.0k constitutes the majority of total compensation received by the CEO.
On comparing similar-sized companies in the industry with market capitalizations below UK£154m, we found that the median total CEO compensation was UK£236k. This suggests that Paul Webb is paid more than the median for the industry. Furthermore, Paul Webb directly owns UK£60k worth of shares in the company.
Talking in terms of the industry, salary represented approximately 78% of total compensation out of all the companies we analyzed, while other remuneration made up 22% of the pie. Synectics pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Synectics plc's Growth
Over the last three years, Synectics plc has shrunk its earnings per share by 48% per year. Its revenue is down 17% over the previous year.
Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation 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 Synectics plc Been A Good Investment?
Since shareholders would have lost about 57% over three years, some Synectics plc investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
As we noted earlier, Synectics pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Disappointingly, share price gains over the last three years have failed to materialize. What's equally worrying is that the company isn't growing by our analysis. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for Synectics that you should be aware of before investing.
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. 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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