Paul Lynam has been the CEO of Secure Trust Bank Plc (LON:STB) since 2010. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Paul Lynam's Compensation Compare With Similar Sized Companies?
Our data indicates that Secure Trust Bank Plc is worth UK£234m, and total annual CEO compensation was reported as UK£1.9m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at UK£1.2m. We looked at a group of companies with market capitalizations from UK£79m to UK£315m, and the median CEO total compensation was UK£513k.
As you can see, Paul Lynam is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Secure Trust Bank Plc is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at Secure Trust Bank has changed over time.
Is Secure Trust Bank Plc Growing?
On average over the last three years, Secure Trust Bank Plc has grown earnings per share (EPS) by 23% each year (using a line of best fit). It achieved revenue growth of 18% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. You might want to check this free visual report on analyst forecasts for future earnings.
Has Secure Trust Bank Plc Been A Good Investment?
With a three year total loss of 39%, Secure Trust Bank Plc would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
We compared total CEO remuneration at Secure Trust Bank Plc with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
However we must not forget that the EPS growth has been very strong over three years. On the other hand returns to investors over the same period have probably disappointed many. 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. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Secure Trust Bank.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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