Mark Nichols became the CEO of Xeros Technology Group plc (LON:XSG) in 2015, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Comparing Xeros Technology Group plc's CEO Compensation With the industry
According to our data, Xeros Technology Group plc has a market capitalization of UK£30m, and paid its CEO total annual compensation worth UK£304k over the year to December 2019. That's mostly flat as compared to the prior year's compensation. In particular, the salary of UK£286.0k, makes up a huge portion of the total compensation being paid to the CEO.
In comparison with other companies in the industry with market capitalizations under UK£155m, the reported median total CEO compensation was UK£403k. This suggests that Xeros Technology Group remunerates its CEO largely in line with the industry average. What's more, Mark Nichols holds UK£132k worth of shares in the company in their own name.
Talking in terms of the industry, salary represented approximately 48% of total compensation out of all the companies we analyzed, while other remuneration made up 52% of the pie. According to our research, Xeros Technology Group has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Xeros Technology Group plc's Growth
Xeros Technology Group plc's earnings per share (EPS) grew 60% per year over the last three years. In the last year, its revenue is down 61%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Xeros Technology Group plc Been A Good Investment?
Since shareholders would have lost about 99% over three years, some Xeros Technology Group plc investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
As previously discussed, Mark is compensated close to the median for companies of its size, and which belong to the same industry. Meanwhile, shareholder returns paint a sorry picture for the company, finishing in the red over the last three years. But EPS growth is moving in a favorable direction, certainly a positive sign. Overall, we wouldn't say Mark is paid an unjustified compensation, but shareholders might not favor a raise before shareholder returns show a positive trend.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 6 warning signs (and 1 which is a bit concerning) in Xeros Technology Group we think you should know about.
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.
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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