This article will reflect on the compensation paid to Mike Creedon who has served as CEO of SDI Group plc (LON:SDI) since 2012. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for SDI Group.
Comparing SDI Group plc's CEO Compensation With the industry
Our data indicates that SDI Group plc has a market capitalization of UK£62m, and total annual CEO compensation was reported as UK£236k for the year to April 2020. Notably, that's an increase of 16% over the year before. In particular, the salary of UK£141.0k, 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£154m, the reported median total CEO compensation was UK£219k. This suggests that SDI Group remunerates its CEO largely in line with the industry average. What's more, Mike Creedon holds UK£280k worth of shares in the company in their own name.
On an industry level, roughly 62% of total compensation represents salary and 38% is other remuneration. Our data reveals that SDI Group allocates salary more or less in line with the wider market. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at SDI Group plc's Growth Numbers
SDI Group plc's earnings per share (EPS) grew 32% per year over the last three years. Its revenue is up 40% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has SDI Group plc Been A Good Investment?
Most shareholders would probably be pleased with SDI Group plc for providing a total return of 169% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
As we noted earlier, SDI Group pays its CEO in line with similar-sized companies belonging to the same industry. The company is growing EPS and total shareholder returns have been pleasing. So one could argue that CEO compensation is quite modest, if you consider company performance! Stockholders might even be okay with a bump in pay, seeing as how investor returns have been so strong.
CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 2 warning signs for SDI Group that investors should look into moving forward.
Important note: SDI 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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