Why Telecom Plus' (LON:TEP) CEO Pay Matters

This article will reflect on the compensation paid to Andrew Lindsay who has served as CEO of Telecom Plus PLC (LON:TEP) since 2010. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Telecom Plus.

See our latest analysis for Telecom Plus

How Does Total Compensation For Andrew Lindsay Compare With Other Companies In The Industry?

According to our data, Telecom Plus PLC has a market capitalization of UK£1.1b, and paid its CEO total annual compensation worth UK£594k over the year to March 2020. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at UK£566.0k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations ranging from UK£732m to UK£2.3b, the reported median CEO total compensation was UK£940k. This suggests that Andrew Lindsay is paid below the industry median. Furthermore, Andrew Lindsay directly owns UK£4.9m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 34% of total compensation represents salary, while the remainder of 66% is other remuneration. Telecom Plus pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Telecom Plus PLC's Growth Numbers

Telecom Plus PLC's earnings per share (EPS) grew 6.6% per year over the last three years. It achieved revenue growth of 2.9% over the last year.

We would argue that the improvement in revenue is good, but isn't particularly impressive, but it is good to see modest EPS growth. So there are some positives here, but not enough to earn high praise. 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 Telecom Plus PLC Been A Good Investment?

Most shareholders would probably be pleased with Telecom Plus PLC for providing a total return of 34% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Telecom Plus pays its CEO a majority of compensation through a salary. As we noted earlier, Telecom Plus pays its CEO lower than the norm for similar-sized companies belonging to the same industry. On the other hand, shareholder returns have been have been very pleasing, over the last three years, and that should put a smile on the faces of investors. So, considering these tasty returns, CEO compensation seems quite appropriate.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 1 warning sign for Telecom Plus that investors should look into moving forward.

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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