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It Looks Like RPS Group plc's (LON:RPS) CEO May Expect Their Salary To Be Put Under The Microscope

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RPS Group plc (LON:RPS) has not performed well recently and CEO John Douglas will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 28 April 2021. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. The data we present below explains why we think CEO compensation is not consistent with recent performance.

See our latest analysis for RPS Group

How Does Total Compensation For John Douglas Compare With Other Companies In The Industry?

According to our data, RPS Group plc has a market capitalization of UK£252m, and paid its CEO total annual compensation worth UK£708k over the year to December 2020. Notably, that's a decrease of 24% over the year before. We note that the salary portion, which stands at UK£467.0k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations ranging from UK£143m to UK£574m, the reported median CEO total compensation was UK£495k. Accordingly, our analysis reveals that RPS Group plc pays John Douglas north of the industry median. Moreover, John Douglas also holds UK£992k worth of RPS Group stock directly under their own name.

Component

2020

2019

Proportion (2020)

Salary

UK£467k

UK£508k

66%

Other

UK£241k

UK£426k

34%

Total Compensation

UK£708k

UK£934k

100%

On an industry level, around 66% of total compensation represents salary and 34% is other remuneration. RPS Group is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

ceo-compensation
ceo-compensation

A Look at RPS Group plc's Growth Numbers

RPS Group plc has reduced its earnings per share by 47% a year over the last three years. In the last year, its revenue is down 11%.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has RPS Group plc Been A Good Investment?

With a total shareholder return of -60% over three years, RPS Group plc shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 2 warning signs for RPS Group that investors should look into moving forward.

Important note: RPS Group is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.

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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