Here’s why we think Microsaic Systems plc (LON: MSYS) CEO compensation seems fair
Performances at Microsaic Systems plc (LON: MSYS) has been pretty moot lately and shareholders may be wondering how CEO Glenn Tracey plans to tackle this problem. They will have the opportunity to exercise their voting rights to influence the future direction of the company at the next annual general meeting on June 17, 2021. Setting an appropriate compensation for executives to align with the interests of shareholders can also be a means of influencing the performance of the company in the long term. We’ve prepared an analysis below to show that CEO compensation seems reasonable.
See our latest review for Microsaic Systems
How does Glenn Tracey’s total compensation compare to that of other companies in the industry?
Our data indicates that Microsaic Systems plc has a market cap of £ 14million and the CEO’s total annual compensation has been reported at £ 135,000 for the year up to December 2020. This is a notable drop of 12% compared to last year. In particular, the salary of UK £ 113.8,000 accounts for a large part of the total compensation paid to the CEO.
Compared to other companies in the industry with market capitalizations of less than £ 141million, the reported median total CEO compensation was £ 196,000. In other words, Microsaic Systems pays its CEO less than the industry median.
|Salary||United Kingdom £ 114,000||United Kingdom £ 134k||84%|
|Other||United Kingdom £ 21k||United Kingdom £ 21k||16%|
|Total compensation||United Kingdom £ 135,000||United Kingdom £ 154k||100%|
In terms of industry, salary represented around 67% of total compensation for all the companies we analyzed, while other compensation represented 33% of the pie. Microsaic Systems pays a higher share of its compensation through salary compared to the industry as a whole. If salary dominates total compensation, this suggests that CEO compensation leans less towards the variable part, which is generally performance-related.
A look at the growth figures of Microsaic Systems plc
Microsaic Systems plc’s earnings per share (EPS) have grown 40% per year over the past three years. Last year, its turnover fell by 77%.
Overall, this is a positive result for shareholders, which shows that the company has improved in recent years. Lack of revenue growth isn’t ideal, but it’s the bottom line that matters most in business. We don’t have analyst forecasts, but you can better understand its growth by looking at this more detailed historical chart of earnings, income and cash flow.
Has Microsaic Systems plc been a good investment?
Few of Microsaic Systems plc shareholders would be happy with a three-year return of -89%. Therefore, it could be upsetting for shareholders if the CEO is paid generously.
The fact that shareholders received a negative return on the share price is certainly disconcerting. However, this contrasts with the strong growth in BPA recently and suggests that there may be other factors at play to push the share price down. A key objective for the board of directors and management will be how to align the stock price with the fundamentals. At the next AGM, shareholders should take this opportunity to raise these concerns with the board and review their investment thesis with respect to the company.
We can learn a lot about a business by studying its CEO compensation trends, as well as looking at other aspects of the business. In our study, we found 4 warning signs for Microsaic systems you need to be aware, and 3 of them are of concern.
Of course, you might find a fantastic investment by looking at another set of stocks. So take a look at this free list of interesting companies.
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This Simply Wall St article is general in nature. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in the mentioned stocks.
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