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Here's Why We Think B.P. Marsh & Partners PLC's (LON:BPM) CEO Compensation Looks Fair

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Performance at B.P. Marsh & Partners PLC (LON:BPM) has been rather uninspiring recently and shareholders may be wondering how CEO Alice Hannah Foulk plans to fix this. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 14 July 2021. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. We think CEO compensation looks appropriate given the data we have put together.

View our latest analysis for B.P. Marsh & Partners

Comparing B.P. Marsh & Partners PLC's CEO Compensation With the industry

Our data indicates that B.P. Marsh & Partners PLC has a market capitalization of UK£122m, and total annual CEO compensation was reported as UK£262k for the year to January 2021. We note that's an increase of 9.0% above last year. In particular, the salary of UK£170.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between UK£73m and UK£290m had a median total CEO compensation of UK£465k. In other words, B.P. Marsh & Partners pays its CEO lower than the industry median. Furthermore, Alice Hannah Foulk directly owns UK£700k worth of shares in the company.

Component

2021

2020

Proportion (2021)

Salary

UK£170k

UK£150k

65%

Other

UK£92k

UK£90k

35%

Total Compensation

UK£262k

UK£240k

100%

On an industry level, around 47% of total compensation represents salary and 53% is other remuneration. B.P. Marsh & Partners is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

ceo-compensation
ceo-compensation

A Look at B.P. Marsh & Partners PLC's Growth Numbers

Over the last three years, B.P. Marsh & Partners PLC has shrunk its earnings per share by 18% per year. In the last year, its revenue is up 4.3%.

Overall this is not a very positive result for shareholders. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has B.P. Marsh & Partners PLC Been A Good Investment?

B.P. Marsh & Partners PLC has generated a total shareholder return of 22% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

While it's true that shareholders have seen decent returns, it's hard to overlook the lack of earnings growth and this makes us wonder if the current returns can continue. Shareholders might want to question the board about these concerns, and revisit their investment thesis for the company.

Shareholders may want to check for free if B.P. Marsh & Partners insiders are buying or selling shares.

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.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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