Shareholders Will Probably Not Have Any Issues With Microsaic Systems plc's (LON:MSYS) CEO Compensation

Performance at Microsaic Systems plc (LON:MSYS) has been rather uninspiring recently and shareholders may be wondering how CEO Glenn Tracey plans to fix this. At the next AGM coming up on 17 June 2021, they can influence managerial decision making through voting on resolutions, including executive remuneration. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

See our latest analysis for Microsaic Systems

How Does Total Compensation For Glenn Tracey Compare With Other Companies In The Industry?

At the time of writing, our data shows that Microsaic Systems plc has a market capitalization of UK£14m, and reported total annual CEO compensation of UK£135k for the year to December 2020. Notably, that's a decrease of 12% over the year before. In particular, the salary of UK£113.8k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the industry with market capitalizations below UK£141m, we found that the median total CEO compensation was UK£196k. This suggests that Glenn Tracey is paid below the industry median.

Talking in terms of the industry, salary represented approximately 67% of total compensation out of all the companies we analyzed, while other remuneration made up 33% of the pie. Microsaic Systems is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Microsaic Systems plc's Growth

Microsaic Systems plc has seen its earnings per share (EPS) increase by 40% a year over the past three years. Its revenue is down 77% over the previous year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Microsaic Systems plc Been A Good Investment?

The return of -89% over three years would not have pleased Microsaic Systems plc shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

The fact that shareholders have earned a negative share price return is certainly disconcerting. This diverges with the robust growth in EPS, suggesting that there is a large discrepancy between share price and fundamentals. A key question may be why the fundamentals have not yet been reflected into the share price. The upcoming AGM will provide shareholders the opportunity to raise their concerns and evaluate if the board’s judgement and decision-making is aligned with their expectations.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 4 warning signs for Microsaic Systems (of which 3 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Microsaic Systems, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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