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Should You Worry About TT Electronics plc’s (LON:TTG) CEO Pay?

Richard Tyson became the CEO of TT Electronics plc (LON:TTG) in 2014. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for TT Electronics

How Does Richard Tyson’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that TT Electronics plc has a market cap of UK£317m, and is paying total annual CEO compensation of UK£1.8m. (This number is for the twelve months until 2017). We think total compensation is more important but we note that the CEO salary is lower, at UK£444k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of UK£158m to UK£632m. The median total CEO compensation was UK£693k.

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As you can see, Richard Tyson is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean TT Electronics plc is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see a visual representation of the CEO compensation at TT Electronics, below.

LSE:TTG CEO Compensation December 13th 18
LSE:TTG CEO Compensation December 13th 18

Is TT Electronics plc Growing?

On average over the last three years, TT Electronics plc has grown earnings per share (EPS) by 49% each year. It achieved revenue growth of 5.6% over the last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. It’s good to see a bit of revenue growth, as this suggests the business is able to grow sustainably.

You might want to check this free visual report on analyst forecasts for future earnings.

Has TT Electronics plc Been A Good Investment?

Most shareholders would probably be pleased with TT Electronics plc for providing a total return of 52% over three years. This strong performance might mean some shareholders don’t mind if the CEO is paid more than is normal for a company of its size.

In Summary…

We examined the amount TT Electronics plc pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. On top of that, in the same period, returns to shareholders have been great. As a result of this good performance, the CEO remuneration may well be quite reasonable. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at TT Electronics.

Of course, the past can be informative so you might be interested in considering this analytical visualization showing the company history of earnings and revenue.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.