What Can We Make Of Cerillion's (LON:CER) CEO Compensation?

The CEO of Cerillion Plc (LON:CER) is Louis Hall, 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 Cerillion.

Check out our latest analysis for Cerillion

Comparing Cerillion Plc's CEO Compensation With the industry

Our data indicates that Cerillion Plc has a market capitalization of UK£116m, and total annual CEO compensation was reported as UK£588k for the year to September 2020. That's a notable increase of 10% on last year. In particular, the salary of UK£301.8k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between UK£74m and UK£294m had a median total CEO compensation of UK£446k. Accordingly, our analysis reveals that Cerillion Plc pays Louis Hall north of the industry median. Moreover, Louis Hall also holds UK£35m worth of Cerillion stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 68% of total compensation out of all the companies we analyzed, while other remuneration made up 32% of the pie. In Cerillion's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader 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.

A Look at Cerillion Plc's Growth Numbers

Cerillion Plc has seen its earnings per share (EPS) increase by 8.9% a year over the past three years. It achieved revenue growth of 11% over the last year.

This revenue growth could really point to a brighter future. And the improvement in EPSis modest but respectable. So while performance isn't amazing, we think it really does seem quite respectable. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Cerillion Plc Been A Good Investment?

We think that the total shareholder return of 183%, over three years, would leave most Cerillion Plc shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

As we noted earlier, Cerillion pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Importantly though, shareholder returns for the last three years have been excellent. Albeit, EPS growth has not been as impressive over the same time frame. So, although we would've liked to see stronger EPS growth, positive investor returns lead us to believe CEO compensation is reasonable.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 1 warning sign for Cerillion that investors should look into moving forward.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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