Yahoo Finance This Is Why Shareholders May Want To Hold Back On A Pay Rise For Limitless Earth plc's (LON:LME) CEO
Key Insights
Limitless Earth's Annual General Meeting to take place on 13th of December
Salary of UKÂŁ70.0k is part of CEO Guido Contesso's total remuneration
Total compensation is 67% below industry average
Limitless Earth's three-year loss to shareholders was 84% while its EPS was down 56% over the past three years
The underwhelming performance at Limitless Earth plc (LON:LME) recently has probably not pleased shareholders. At the upcoming AGM on 13th of December, shareholders may have the opportunity to influence management to turn the performance around by voting on resolutions such as executive remuneration and other matters. From our analysis below, we think CEO compensation looks appropriate for now.
Check out our latest analysis for Limitless Earth
How Does Total Compensation For Guido Contesso Compare With Other Companies In The Industry?
At the time of writing, our data shows that Limitless Earth plc has a market capitalization of UKÂŁ1.5m, and reported total annual CEO compensation of UKÂŁ70k for the year to January 2023. There was no change in the compensation compared to last year. It is worth noting that the CEO compensation consists entirely of the salary, worth UKÂŁ70k.
On comparing similar-sized companies in the British Capital Markets industry with market capitalizations below UKÂŁ159m, we found that the median total CEO compensation was UKÂŁ210k. Accordingly, Limitless Earth pays its CEO under the industry median. Moreover, Guido Contesso also holds UKÂŁ56k worth of Limitless Earth stock directly under their own name.
Component | 2023 | 2022 | Proportion (2023) |
Salary | UKÂŁ70k | UKÂŁ70k | 100% |
Other | - | - | - |
Total Compensation | UKÂŁ70k | UKÂŁ70k | 100% |
On an industry level, around 54% of total compensation represents salary and 46% is other remuneration. Speaking on a company level, Limitless Earth prefers to tread along a traditional path, disbursing all compensation through a salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Limitless Earth plc's Growth
Over the last three years, Limitless Earth plc has shrunk its earnings per share by 56% per year. In the last year, the company lost virtually all of its revenue.
Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Limitless Earth plc Been A Good Investment?
Few Limitless Earth plc shareholders would feel satisfied with the return of -84% over three years. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
Limitless Earth pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.
CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 4 warning signs for Limitless Earth you should be aware of, and 3 of them are significant.
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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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
