Shareholders May Be A Bit More Conservative With Trakm8 Holdings PLC's (LON:TRAK) CEO Compensation For Now

Shareholders of Trakm8 Holdings PLC (LON:TRAK) will have been dismayed by the negative share price return over the last three years. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 23 September 2021. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for Trakm8 Holdings

How Does Total Compensation For John Watkins Compare With Other Companies In The Industry?

At the time of writing, our data shows that Trakm8 Holdings PLC has a market capitalization of UK£10m, and reported total annual CEO compensation of UK£289k for the year to March 2021. There was no change in the compensation compared to last year. Notably, the salary of UK£289k is the entirety of the CEO compensation.

For comparison, other companies in the industry with market capitalizations below UK£145m, reported a median total CEO compensation of UK£289k. So it looks like Trakm8 Holdings compensates John Watkins in line with the median for the industry. Furthermore, John Watkins directly owns UK£1.6m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2021	2020	Proportion (2021)
Salary	UK£289k	UK£289k	100%
Other	-	-	-
Total Compensation	UK£289k	UK£289k	100%

Talking in terms of the industry, salary represented approximately 80% of total compensation out of all the companies we analyzed, while other remuneration made up 20% of the pie. On a company level, Trakm8 Holdings prefers to reward its CEO through a salary, opting not to pay John Watkins through 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.

Trakm8 Holdings PLC's Growth

Trakm8 Holdings PLC's earnings per share (EPS) grew 7.6% per year over the last three years. Its revenue is down 18% over the previous year.

We would prefer it if there was revenue growth, but it is good to see a modest EPS growth at least. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Trakm8 Holdings PLC Been A Good Investment?

With a total shareholder return of -66% over three years, Trakm8 Holdings PLC shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Trakm8 Holdings rewards its CEO solely through a salary, ignoring non-salary benefits completely. Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would be keen to know what's holding the stock back when earnings have grown. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 3 warning signs for Trakm8 Holdings you should be aware of, and 1 of them can't be ignored.

Switching gears from Trakm8 Holdings, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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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