Shareholders may find it difficult to justify the increase in CEO compensation of Location Sciences Group PLC (LON: LSAI) at this time
The disappointing share price performance of Location Sciences Group PLC (LON: LSAI) over the past three years would have disappointed many shareholders. Despite positive EPS growth in recent years, the stock price has not kept pace with the fundamental performance of the company. The general meeting of June 18, 2021 could be an opportunity for shareholders to bring these concerns to the attention of the board of directors. They could also try to influence the leadership and management of the company by passing resolutions such as executive compensation and other matters relating to the company. We believe shareholders may be reluctant to increase CEO compensation at this time, based on our analysis below.
Discover our latest analysis for Location Sciences Group
Comparison of the compensation of the CEO of Location Sciences Group PLC with the industry
At the time of writing, our data shows Location Sciences Group PLC has a market capitalization of £ 21million and has reported a total annual CEO compensation of £ 175,000 for the year up to December 2020. He This is only a slight increase of 4.6% from last year. Notably, the salary, which amounts to £ 156,000, accounts for the bulk of the total compensation paid.
Comparing similarly sized companies in the industry with market caps below £ 141million, we found that the median total CEO compensation was £ 249,000. So it appears that Location Sciences Group is compensating Mark Slade in line with the industry median. In addition, Mark Slade directly owns shares in the company worth £ 48,000.
|Salary||United Kingdom £ 156,000||United Kingdom £ 150k||89%|
|Other||United Kingdom £ 19k||United Kingdom £ 17,000||11%|
|Total compensation||United Kingdom £ 175k||United Kingdom £ 167,000||100%|
In terms of industry, salary made up around 68% of total compensation for all the companies we analyzed, while other compensation made up 32% of the pie. Location Sciences Group pays 89% of the remuneration in the form of a salary, well above the industry average. If the total compensation is oriented towards the salary, this suggests that the variable part – which is generally linked to performance, is lower.
A look at the growth figures of Location Sciences Group PLC
Over the past three years, Location Sciences Group PLC has seen its earnings per share (EPS) grow by 94% per year. Its turnover is down 10% compared to the previous year.
Overall, this is a positive result for shareholders, which shows that the company has improved in recent years. While it would be good to see income growth, profits matter more in the end. 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.
Was Location Sciences Group PLC a good investment?
The return of -74% over three years would not have pleased the shareholders of Location Sciences Group PLC. This suggests that it would be unwise for the company to pay the CEO too generously.
Shareholders have not seen their shares increase in value, rather they have seen their shares decline. The fact that the stock price has not risen in line with profits may indicate that other issues may be affecting this stock. Shareholders would probably be keen to know what other factors could weigh on the stock. The next AGM will be an opportunity for shareholders to question the board of directors on key issues, such as CEO compensation or any other issues they may have and to review their investment thesis regarding the society.
CEO compensation is an important area to watch, but we also need to pay attention to other attributes of the company. We have identified 4 warning signs for Location Sciences Group (1 is significant!) That you should know before investing here.
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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 any of the stocks mentioned.
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