Osman Abdullah has been the CEO of Petards Group plc (LON:PEG) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Petards Group.
How Does Total Compensation For Osman Abdullah Compare With Other Companies In The Industry?
At the time of writing, our data shows that Petards Group plc has a market capitalization of UK£3.7m, and reported total annual CEO compensation of UK£155k for the year to December 2019. That's a notable increase of 40% on last year. In particular, the salary of UK£130.0k, makes up a huge portion of the total compensation being paid to the CEO.
For comparison, other companies in the industry with market capitalizations below UK£155m, reported a median total CEO compensation of UK£275k. That is to say, Osman Abdullah is paid under the industry median. What's more, Osman Abdullah holds UK£139k worth of shares in the company in their own name.
Speaking on an industry level, nearly 66% of total compensation represents salary, while the remainder of 34% is other remuneration. According to our research, Petards Group has allocated a higher percentage of pay to salary in comparison to the wider 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.
A Look at Petards Group plc's Growth Numbers
Over the last three years, Petards Group plc has shrunk its earnings per share by 96% per year. In the last year, its revenue is down 27%.
Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Petards Group plc Been A Good Investment?
With a three year total loss of 75% for the shareholders, Petards Group plc would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
As we noted earlier, Petards Group pays its CEO lower than the norm for similar-sized companies belonging to the same industry. Over the last three years, shareholder returns have been downright disappointing, and EPSgrowth has been equally disappointing. We can't say the CEO compensation is high, but shareholders will be cold to a bump at this stage, considering negative investor returns.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 3 warning signs for Petards Group (2 shouldn't be ignored!) that you should be aware of before investing here.
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.
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