This article will reflect on the compensation paid to James Barder who has served as CEO of Futura Medical plc (LON:FUM) since 2001. This analysis will also assess whether Futura Medical pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing Futura Medical plc's CEO Compensation With the industry
According to our data, Futura Medical plc has a market capitalization of UK£33m, and paid its CEO total annual compensation worth UK£238k over the year to December 2019. Notably, that's a decrease of 14% over the year before. Notably, the salary which is UK£235.6k, represents most of the total compensation being paid.
In comparison with other companies in the industry with market capitalizations under UK£155m, the reported median total CEO compensation was UK£274k. This suggests that Futura Medical remunerates its CEO largely in line with the industry average. What's more, James Barder holds UK£162k worth of shares in the company in their own name.
On an industry level, roughly 35% of total compensation represents salary and 65% is other remuneration. Futura Medical is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at Futura Medical plc's Growth Numbers
Futura Medical plc has reduced its earnings per share by 5.3% a year over the last three years. Its revenue is up 166% over the last year.
Investors would be a bit wary of companies that have lower EPS But in contrast the revenue growth is strong, suggesting future potential for EPS growth. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Futura Medical plc Been A Good Investment?
Given the total shareholder loss of 47% over three years, many shareholders in Futura Medical plc are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
Futura Medical pays its CEO a majority of compensation through a salary. As we touched on above, Futura Medical plc is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But revenue growth seems to be inching northward, a heartening sign for the company. Contrarily, shareholder returns are in the red over the same stretch. EPS is also not growing, undoubtedly leading to further headaches. We'd say CEO compensation isn't unfair, but shareholders may be wary of a bump in pay before the company substantially improves overall performance.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 6 warning signs for Futura Medical you should be aware of, and 2 of them make us uncomfortable.
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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