How Should Investors React To Frontier IP Group Plc's (LON:FIPP) CEO Pay?
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Neil Crabb became the CEO of Frontier IP Group Plc (LON:FIPP) in 1970. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
View our latest analysis for Frontier IP Group
How Does Neil Crabb's Compensation Compare With Similar Sized Companies?
Our data indicates that Frontier IP Group Plc is worth UK£34m, and total annual CEO compensation is UK£139k. (This number is for the twelve months until June 2018). While we always look at total compensation first, we note that the salary component is less, at UK£123k. We looked at a group of companies with market capitalizations under UK£158m, and the median CEO total compensation was UK£249k.
Most shareholders would consider it a positive that Neil Crabb takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it's important we delve into the performance of the actual business.
You can see, below, how CEO compensation at Frontier IP Group has changed over time.
Is Frontier IP Group Plc Growing?
Over the last three years Frontier IP Group Plc has shrunk its earnings per share by an average of 13% per year (measured with a line of best fit). Its revenue is up 26% over last year.
As investors, we are a bit wary of companies that have lower earnings per share, over three years. On the other hand, the strong revenue growth suggests the business is growing. It's hard to reach a conclusion about business performance right now. This may be one to watch. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Frontier IP Group Plc Been A Good Investment?
Boasting a total shareholder return of 172% over three years, Frontier IP Group Plc has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary...
Frontier IP Group Plc is currently paying its CEO below what is normal for companies of its size.
It's well worth noting that while Neil Crabb is paid below what is normal at companies of similar size, the returns have been very pleasing, over the last three years. We would like to see EPS growth, but in our view it seems the CEO is modestly remunerated. Shareholders may want to check for free if Frontier IP Group insiders are buying or selling shares.
Important note: Frontier IP Group may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
