Yahoo Finance Is President Energy Plc (LON:PPC) Excessively Paying Its CEO?
Peter Levine became the CEO of President Energy Plc (LON:PPC) in 2015. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
View our latest analysis for President Energy
How Does Peter Levine's Compensation Compare With Similar Sized Companies?
According to our data, President Energy Plc has a market capitalization of UK£45m, and paid its CEO total annual compensation worth US$586k over the year to December 2018. Notably, the salary of US$586k is the vast majority of the CEO compensation. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$325k.
As you can see, Peter Levine is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean President Energy Plc is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at President Energy has changed over time.
Is President Energy Plc Growing?
Over the last three years President Energy Plc has grown its earnings per share (EPS) by an average of 93% per year (using a line of best fit). Its revenue is up 42% over last year.
This demonstrates that the company has been improving recently. A good result. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. Shareholders might be interested in this free visualization of analyst forecasts.
Has President Energy Plc Been A Good Investment?
Since shareholders would have lost about 45% over three years, some President Energy Plc shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
We compared total CEO remuneration at President Energy Plc with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.
However we must not forget that the EPS growth has been very strong over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. So you may want to check if insiders are buying President Energy shares with their own money (free access).
Important note: President Energy 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.
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