Yahoo Finance Is Pennant International Group plc's (LON:PEN) CEO Pay Justified?
In 2017, Phil Walker was appointed CEO of Pennant International Group plc (LON:PEN). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
See our latest analysis for Pennant International Group
How Does Phil Walker's Compensation Compare With Similar Sized Companies?
Our data indicates that Pennant International Group plc is worth UK£17m, and total annual CEO compensation was reported as UK£209k for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at UK£175k. We looked at a group of companies with market capitalizations under UK£163m, and the median CEO total compensation was UK£267k.
Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of Pennant International Group. Talking in terms of the sector, salary represented approximately 42% of total compensation out of all the companies we analysed, while other remuneration made up 58% of the pie. It's interesting to note that Pennant International Group pays out a greater portion of remuneration through salary, in comparison to the wider industry.
So Phil Walker receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context. You can see, below, how CEO compensation at Pennant International Group has changed over time.
Is Pennant International Group plc Growing?
Pennant International Group plc has reduced its earnings per share by an average of 57% a year, over the last three years (measured with a line of best fit). Its revenue is down 3.0% over last year.
Unfortunately, earnings per share have trended lower over the last three years. 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. You might want to check this free visual report on analyst forecasts for future earnings.
Has Pennant International Group plc Been A Good Investment?
With a three year total loss of 50%, Pennant International Group plc would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
In Summary...
Phil Walker is paid around what is normal for the leaders of comparable size companies.
Returns have been disappointing and the company is not growing its earnings per share. Few would argue that it's wise for the company to pay any more, before returns improve. Shifting gears from CEO pay for a second, we've picked out 3 warning signs for Pennant International Group that investors should be aware of in a dynamic business environment.
Important note: Pennant International Group may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
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