This article will reflect on the compensation paid to Andy Pendlebury who has served as CEO of RTC Group plc (LON:RTC) since 2007. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for RTC Group.
Comparing RTC Group plc's CEO Compensation With the industry
At the time of writing, our data shows that RTC Group plc has a market capitalization of UK£6.4m, and reported total annual CEO compensation of UK£508k for the year to December 2020. Notably, that's a decrease of 14% over the year before. In particular, the salary of UK£280.0k, 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£142m, the reported median total CEO compensation was UK£279k. Accordingly, our analysis reveals that RTC Group plc pays Andy Pendlebury north of the industry median. What's more, Andy Pendlebury holds UK£303k worth of shares in the company in their own name.
On an industry level, roughly 82% of total compensation represents salary and 18% is other remuneration. It's interesting to note that RTC Group allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at RTC Group plc's Growth Numbers
Over the past three years, RTC Group plc has seen its earnings per share (EPS) grow by 1.8% per year. Its revenue is down 4.2% over the previous year.
We would prefer it if there was revenue growth, but it is good to see a modest EPS growth at least. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has RTC Group plc Been A Good Investment?
Since shareholders would have lost about 19% over three years, some RTC Group plc investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
As we touched on above, RTC Group plc is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. The growth in the business has been uninspiring, but the shareholder returns for RTC Group have arguably been worse, over the last three years. And the situation doesn't look all that good when you see Andy is remunerated higher than the industry average. With such poor returns, we would understand if shareholders had concerns related to the CEO's pay.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 2 warning signs (and 1 which is potentially serious) in RTC Group we think you should know about.
Important note: RTC Group is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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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