We Discuss Why Yü Group PLC's (LON:YU.) CEO Compensation May Be Closely Reviewed

Yü Group PLC (LON:YU.) has not performed well recently and CEO Bobby Kalar will probably need to up their game. At the upcoming AGM on 27 May 2021, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. The data we present below explains why we think CEO compensation is not consistent with recent performance.

View our latest analysis for Yü Group

Comparing Yü Group PLC's CEO Compensation With the industry

Our data indicates that Yü Group PLC has a market capitalization of UK£44m, and total annual CEO compensation was reported as UK£235k for the year to December 2020. That's mostly flat as compared to the prior year's compensation. Notably, the salary which is UK£225.0k, represents most of the total compensation being paid.

On comparing similar-sized companies in the industry with market capitalizations below UK£141m, we found that the median total CEO compensation was UK£215k. So it looks like Yü Group compensates Bobby Kalar in line with the median for the industry. What's more, Bobby Kalar holds UK£23m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2020	2019	Proportion (2020)
Salary	UK£225k	UK£231k	96%
Other	UK£10k	UK£10k	4%
Total Compensation	UK£235k	UK£241k	100%

Speaking on an industry level, nearly 77% of total compensation represents salary, while the remainder of 23% is other remuneration. Investors will find it interesting that Yü Group pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Yü Group PLC's Growth

Over the last three years, Yü Group PLC has shrunk its earnings per share by 19% per year. It saw its revenue drop 9.0% over the last year.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation 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 Yü Group PLC Been A Good Investment?

Few Yü Group PLC shareholders would feel satisfied with the return of -71% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Bobby receives almost all of their compensation through a salary. Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. 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.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Yü Group 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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