Yahoo Finance Why Touchstar's (LON:TST) CEO Pay Matters
The CEO of Touchstar plc (LON:TST) is Mark Hardy, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Touchstar.
See our latest analysis for Touchstar
Comparing Touchstar plc's CEO Compensation With the industry
Our data indicates that Touchstar plc has a market capitalization of UK£4.4m, and total annual CEO compensation was reported as UK£207k for the year to December 2019. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at UK£186.0k constitutes the majority of total compensation received by the CEO.
In comparison with other companies in the industry with market capitalizations under UK£152m, the reported median total CEO compensation was UK£269k. This suggests that Touchstar remunerates its CEO largely in line with the industry average.
Component | 2019 | 2018 | Proportion (2019) |
Salary | UK£186k | UK£187k | 90% |
Other | UK£21k | UK£18k | 10% |
Total Compensation | UK£207k | UK£205k | 100% |
On an industry level, roughly 74% of total compensation represents salary and 26% is other remuneration. According to our research, Touchstar has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
Touchstar plc's Growth
Over the last three years, Touchstar plc has shrunk its earnings per share by 7.8% per year. Its revenue is up 7.3% over the last year.
Overall this is not a very positive result for shareholders. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in earnings per share. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Touchstar plc Been A Good Investment?
Given the total shareholder loss of 49% over three years, many shareholders in Touchstar plc are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.
In Summary...
As we touched on above, Touchstar 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. In the meantime, the company has reported declining earnings growth and shareholder returns over the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 2 warning signs for Touchstar you should be aware of, and 1 of them is a bit concerning.
Important note: Touchstar is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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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