Yahoo Finance How Should Investors Feel About Prime People's (LON:PRP) CEO Remuneration?
This article will reflect on the compensation paid to Peter Moore who has served as CEO of Prime People Plc (LON:PRP) since 2006. This analysis will also assess whether Prime People pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
View our latest analysis for Prime People
How Does Total Compensation For Peter Moore Compare With Other Companies In The Industry?
According to our data, Prime People Plc has a market capitalization of UK£7.9m, and paid its CEO total annual compensation worth UK£210k over the year to March 2020. We note that's a decrease of 9.1% compared to last year. We note that the salary portion, which stands at UK£203.6k constitutes the majority of total compensation received by the CEO.
On comparing similar-sized companies in the industry with market capitalizations below UK£146m, we found that the median total CEO compensation was UK£279k. So it looks like Prime People compensates Peter Moore in line with the median for the industry. Furthermore, Peter Moore directly owns UK£1.9m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2020 | 2019 | Proportion (2020) |
Salary | UK£204k | UK£199k | 97% |
Other | UK£6.4k | UK£32k | 3% |
Total Compensation | UK£210k | UK£231k | 100% |
On an industry level, around 79% of total compensation represents salary and 21% is other remuneration. Prime People pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. 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.
A Look at Prime People Plc's Growth Numbers
Prime People Plc has reduced its earnings per share by 45% a year over the last three years. In the last year, its revenue is down 2.7%.
The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. 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 Prime People Plc Been A Good Investment?
Since shareholders would have lost about 9.8% over three years, some Prime People Plc investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
Peter receives almost all of their compensation through a salary. As we noted earlier, Prime People pays its CEO in line with similar-sized companies belonging to the same industry. In the meantime, the company has reported declining EPS growth and shareholder returns over the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 3 warning signs (and 1 which shouldn't be ignored) in Prime People we think you should know about.
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.
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.
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