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How Should Investors React To Sylvania Platinum Limited's (LON:SLP) CEO Pay?

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In 2010 Terry McConnachie was appointed CEO of Sylvania Platinum Limited (LON:SLP). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for Sylvania Platinum

How Does Terry McConnachie's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Sylvania Platinum Limited has a market cap of UK£87m, and is paying total annual CEO compensation of US$507k. (This is based on the year to June 2018). It is worth noting that the CEO compensation consists almost entirely of the salary, worth US$505k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO total compensation to be US$314k.

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Thus we can conclude that Terry McConnachie receives more in total compensation than the median of a group of companies in the same market, and of similar size to Sylvania Platinum Limited. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

The graphic below shows how CEO compensation at Sylvania Platinum has changed from year to year.

AIM:SLP CEO Compensation, June 3rd 2019
AIM:SLP CEO Compensation, June 3rd 2019

Is Sylvania Platinum Limited Growing?

On average over the last three years, Sylvania Platinum Limited has grown earnings per share (EPS) by 51% each year (using a line of best fit). It achieved revenue growth of 23% over the last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. Shareholders might be interested in this free visualization of analyst forecasts.

Has Sylvania Platinum Limited Been A Good Investment?

Boasting a total shareholder return of 344% over three years, Sylvania Platinum Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

We compared total CEO remuneration at Sylvania Platinum Limited with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.

However, the earnings per share growth over three years is certainly impressive. In addition, shareholders have done well over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. Whatever your view on compensation, you might want to check if insiders are buying or selling Sylvania Platinum shares (free trial).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.