Here's Why Shareholders Should Examine AdEPT Technology Group plc's (LON:ADT) CEO Compensation Package More Closely

AdEPT Technology Group plc (LON:ADT) has not performed well recently and CEO Phil Race will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 23 September 2021. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. From our analysis, we think CEO compensation may need a review in light of the recent performance.

View our latest analysis for AdEPT Technology Group

Comparing AdEPT Technology Group plc's CEO Compensation With the industry

According to our data, AdEPT Technology Group plc has a market capitalization of UK£73m, and paid its CEO total annual compensation worth UK£272k over the year to March 2021. That's mostly flat as compared to the prior year's compensation. We note that the salary portion, which stands at UK£262.0k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under UK£145m, the reported median total CEO compensation was UK£248k. From this we gather that Phil Race is paid around the median for CEOs in the industry. Furthermore, Phil Race directly owns UK£47k worth of shares in the company.

Speaking on an industry level, salary and non-salary portions, both make up 50% each of the total remuneration. AdEPT Technology Group has gone down a largely traditional route, paying Phil Race a high salary, giving it preference over non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at AdEPT Technology Group plc's Growth Numbers

Over the last three years, AdEPT Technology Group plc has shrunk its earnings per share by 91% per year. Its revenue is down 6.2% over the previous year.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has AdEPT Technology Group plc Been A Good Investment?

With a three year total loss of 21% for the shareholders, AdEPT Technology Group plc would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Phil receives almost all of their compensation through a salary. Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 3 warning signs (and 2 which are significant) in AdEPT Technology Group we think you should know about.

Important note: AdEPT Technology Group is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.
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