Yahoo Finance Is Futura Medical plc's (LON:FUM) CEO Being Overpaid?
James Barder became the CEO of Futura Medical plc (LON:FUM) in 2001. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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. This process should give us an idea about how appropriately the CEO is paid.
Check out our latest analysis for Futura Medical
How Does James Barder's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Futura Medical plc has a market cap of UK£58m, and is paying total annual CEO compensation of UK£276k. (This is based on the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at UK£230k. We took a group of companies with market capitalizations below UK£162m, and calculated the median CEO total compensation to be UK£256k.
So James Barder 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.
The graphic below shows how CEO compensation at Futura Medical has changed from year to year.
Is Futura Medical plc Growing?
On average over the last three years, Futura Medical plc has shrunk earnings per share by 6.3% each year (measured with a line of best fit). In the last year, the company lost virtually all of its revenue.
Few shareholders would be pleased to read that earnings per share are lower over three years. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Futura Medical plc Been A Good Investment?
With a three year total loss of 58%, Futura Medical plc would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
Remuneration for James Barder is close enough to the median pay for a CEO of a similar sized company .
The company isn't growing EPS, and shareholder returns have been disappointing. Few would argue that it's wise for the company to pay any more, before returns improve. Whatever your view on compensation, you might want to check if insiders are buying or selling Futura Medical shares (free trial).
Important note: Futura Medical 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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. Thank you for reading.
