Nik Philpot has been the CEO of Eckoh plc (LON:ECK) since 2006. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for Eckoh

How Does Nik Philpot's Compensation Compare With Similar Sized Companies?

According to our data, Eckoh plc has a market capitalization of UK£149m, and paid its CEO total annual compensation worth UK£459k over the year to March 2019. We think total compensation is more important but we note that the CEO salary is lower, at UK£289k. We examined companies with market caps from UK£77m to UK£308m, and discovered that the median CEO total compensation of that group was UK£460k.

So Nik Philpot receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

The graphic below shows how CEO compensation at Eckoh has changed from year to year.

Is Eckoh plc Growing?

Eckoh plc has reduced its earnings per share by an average of 3.0% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is up 25%.

Unfortunately, earnings per share have trended lower over the last three years. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.

Has Eckoh plc Been A Good Investment?

Boasting a total shareholder return of 56% over three years, Eckoh plc has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Nik Philpot is paid around what is normal the leaders of comparable size companies.

We feel that earnings per share have been a bit disappointing, but it's nice to see positive shareholder returns over the last three years. So we think most shareholders wouldn't be too worried about CEO compensation, which is close to the median for similar sized companies. Whatever your view on compensation, you might want to check if insiders are buying or selling Eckoh shares (free trial).

Important note: Eckoh 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.

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.

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