Yahoo Finance We Discuss Why Rosslyn Data Technologies plc's (LON:RDT) CEO Compensation May Be Closely Reviewed
Key Insights
Rosslyn Data Technologies' Annual General Meeting to take place on 23rd of November
CEO Paul Watts' total compensation includes salary of UK£180.0k
The total compensation is similar to the average for the industry
Rosslyn Data Technologies' EPS declined by 8.5% over the past three years while total shareholder loss over the past three years was 96%
Rosslyn Data Technologies plc (LON:RDT) has not performed well recently and CEO Paul Watts will probably need to up their game. At the upcoming AGM on 23rd of November, 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. From our analysis, we think CEO compensation may need a review in light of the recent performance.
See our latest analysis for Rosslyn Data Technologies
How Does Total Compensation For Paul Watts Compare With Other Companies In The Industry?
At the time of writing, our data shows that Rosslyn Data Technologies plc has a market capitalization of UK£2.3m, and reported total annual CEO compensation of UK£199k for the year to April 2023. This means that the compensation hasn't changed much from last year. Notably, the salary which is UK£180.0k, represents most of the total compensation being paid.
In comparison with other companies in the British Software industry with market capitalizations under UK£161m, the reported median total CEO compensation was UK£259k. So it looks like Rosslyn Data Technologies compensates Paul Watts in line with the median for the industry.
Component | 2023 | 2022 | Proportion (2023) |
Salary | UK£180k | UK£180k | 90% |
Other | UK£19k | UK£19k | 10% |
Total Compensation | UK£199k | UK£199k | 100% |
On an industry level, around 66% of total compensation represents salary and 34% is other remuneration. According to our research, Rosslyn Data Technologies has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Rosslyn Data Technologies plc's Growth
Over the last three years, Rosslyn Data Technologies plc has shrunk its earnings per share by 8.5% per year. It achieved revenue growth of 10% over the last year.
The decline in EPS is a bit concerning. While the revenue growth is good to see, it is outweighed by the fact that EPS are down, over three years. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Rosslyn Data Technologies plc Been A Good Investment?
With a total shareholder return of -96% over three years, Rosslyn Data Technologies plc shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.
In Summary...
Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO 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 identified 5 warning signs for Rosslyn Data Technologies (3 are significant!) that you should be aware of before investing here.
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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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.
