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Mark Anthony Abbott is the CEO of Egdon Resources plc (LON:EDR), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Comparing Egdon Resources plc's CEO Compensation With the industry
At the time of writing, our data shows that Egdon Resources plc has a market capitalization of UK£6.9m, and reported total annual CEO compensation of UK£195k for the year to July 2020. We note that's a small decrease of 5.3% on last year. We note that the salary portion, which stands at UK£183.6k constitutes the majority of total compensation received by the CEO.
In comparison with other companies in the industry with market capitalizations under UK£147m, the reported median total CEO compensation was UK£284k. Accordingly, Egdon Resources pays its CEO under the industry median. What's more, Mark Anthony Abbott holds UK£250k worth of shares in the company in their own name.
Talking in terms of the industry, salary represented approximately 64% of total compensation out of all the companies we analyzed, while other remuneration made up 36% of the pie. It's interesting to note that Egdon Resources pays out a greater portion of remuneration through salary, compared to the industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at Egdon Resources plc's Growth Numbers
Over the last three years, Egdon Resources plc has shrunk its earnings per share by 31% per year. It saw its revenue drop 56% over the last year.
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. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Egdon Resources plc Been A Good Investment?
Since shareholders would have lost about 70% over three years, some Egdon Resources plc investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
As we noted earlier, Egdon Resources pays its CEO lower than the norm for similar-sized companies belonging to the same industry. EPS growth has failed to impress us, and the same can be said about shareholder returns. It's tough to say that Mark Anthony is earning a very high compensation, but shareholders will likely want to see healthier investor returns before agreeing that a raise is in order.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 5 warning signs for Egdon Resources (1 is potentially serious!) that you should be aware of before investing here.
Switching gears from Egdon Resources, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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