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Is Location Sciences Group PLC's (LON:LSAI) CEO Salary Justified?

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Simply Wall St
·3-min read
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Mark Slade has been the CEO of Location Sciences Group PLC (LON:LSAI) since 2017. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Location Sciences Group

How Does Mark Slade's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Location Sciences Group PLC has a market cap of UK£4.3m, and reported total annual CEO compensation of UK£257k for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at UK£131k. We examined a group of similar sized companies, with market capitalizations of below UK£161m. The median CEO total compensation in that group is UK£265k.

Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of Location Sciences Group. On a sector level, around 70% of total compensation represents salary and 30% is other remuneration. Our data reveals that Location Sciences Group allocates salary in line with the wider market.

That means Mark Slade receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance. You can see a visual representation of the CEO compensation at Location Sciences Group, below.

AIM:LSAI CEO Compensation April 30th 2020
AIM:LSAI CEO Compensation April 30th 2020

Is Location Sciences Group PLC Growing?

On average over the last three years, Location Sciences Group PLC has seen earnings per share (EPS) move in a favourable direction by 128% each year (using a line of best fit). Its revenue is up 60% over last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. You might want to check this free visual report on analyst forecasts for future earnings.

Has Location Sciences Group PLC Been A Good Investment?

Given the total loss of 98% over three years, many shareholders in Location Sciences Group PLC are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

Mark Slade is paid around what is normal for the leaders of comparable size companies.

We'd say the company can boast of its EPS growth, but we find the returns over the last three years to be lacking. Considering the improvement in earnings per share, one could argue that the CEO pay is appropriate, albeit not too low. Taking a breather from CEO compensation, we've spotted 5 warning signs for Location Sciences Group (of which 2 can't be ignored!) you should know about in order to have a holistic understanding of the stock.

Important note: Location Sciences Group 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.

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.

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. Thank you for reading.