Yahoo Finance Is Actual Experience plc's (LON:ACT) CEO Being Overpaid?
The CEO of Actual Experience plc (LON:ACT) is Dave Page. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
See our latest analysis for Actual Experience
How Does Dave Page's Compensation Compare With Similar Sized Companies?
Our data indicates that Actual Experience plc is worth UK£11m, and total annual CEO compensation was reported as UK£154k for the year to September 2019. Notably, the salary of UK£150k is the vast majority of the CEO compensation. We examined a group of similar sized companies, with market capitalizations of below UK£162m. The median CEO total compensation in that group is 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 Actual Experience. On a sector level, around 70% of total compensation represents salary and 30% is other remuneration. Actual Experience is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits.
At first glance this seems like a real positive for shareholders, since Dave Page is paid less than the average total compensation paid by similar sized companies. Though positive, it's important we delve into the performance of the actual business. The graphic below shows how CEO compensation at Actual Experience has changed from year to year.
Is Actual Experience plc Growing?
Actual Experience plc has seen earnings per share (EPS) move positively by an average of 6.0% a year, over the last three years (using a line of best fit). Its revenue is up 80% over last year.
I like the look of the strong year-on-year improvement in revenue. Combined with modest EPS growth, we get a good impression of the company. I wouldn't say this is necessarily top notch growth, but it is certainly promising. Although we don't have analyst forecasts you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Actual Experience plc Been A Good Investment?
With a three year total loss of 92%, Actual Experience plc would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
It appears that Actual Experience plc remunerates its CEO below most similar sized companies.
It's well worth noting that while Dave Page is paid less than most company leaders (at similar sized companies), performance has been somewhat uninspiring, and total returns have been lacking. So while shareholders shouldn't be overly concerned about CEO compensation, they would probably like to see improved shareholder returns before seeing a pay increase. Taking a breather from CEO compensation, we've spotted 5 warning signs for Actual Experience (of which 1 is significant!) you should know about in order to have a holistic understanding of the stock.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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