This Is Why Spectra Systems Corporation's (LON:SPSY) CEO Compensation Looks Appropriate

Key Insights

• Spectra Systems' Annual General Meeting to take place on 29th of July
• Total pay for CEO Nabil Lawandy includes US$493.8k salary
• The overall pay is comparable to the industry average
• Over the past three years, Spectra Systems' EPS grew by 3.7% and over the past three years, the total shareholder return was 110%

Under the guidance of CEO Nabil Lawandy, Spectra Systems Corporation (LON:SPSY) has performed reasonably well 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 July. Here is our take on why we think the CEO compensation looks appropriate.

Check out our latest analysis for Spectra Systems

Comparing Spectra Systems Corporation's CEO Compensation With The Industry

At the time of writing, our data shows that Spectra Systems Corporation has a market capitalization of UK£130m, and reported total annual CEO compensation of US$514k for the year to December 2023. This means that the compensation hasn't changed much from last year. Notably, the salary which is US$493.8k, represents most of the total compensation being paid.

On comparing similar companies from the British Electronic industry with market caps ranging from UK£77m to UK£310m, we found that the median CEO total compensation was US$607k. From this we gather that Nabil Lawandy is paid around the median for CEOs in the industry. What's more, Nabil Lawandy holds UK£6.1m 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	US$494k	US$494k	96%
Other	US$20k	US$20k	4%
Total Compensation	US$514k	US$514k	100%

On an industry level, around 74% of total compensation represents salary and 26% is other remuneration. Spectra Systems is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. 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.

Spectra Systems Corporation's Growth

Spectra Systems Corporation's earnings per share (EPS) grew 3.7% per year over the last three years. Its revenue is up 3.4% over the last year.

We'd prefer higher revenue growth, but the modest improvement in EPS is good. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. 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 Spectra Systems Corporation Been A Good Investment?

We think that the total shareholder return of 110%, over three years, would leave most Spectra Systems Corporation shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Nabil receives almost all of their compensation through a salary. The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. Despite the pleasing results, we still think that any proposed increases to CEO compensation will be examined based on a case by case basis and linked to performance outcomes.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 2 warning signs for Spectra Systems that investors should be aware of in a dynamic business environment.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com