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How Does Midwich Group's (LON:MIDW) CEO Salary Compare to Peers?

Stephen Fenby has been the CEO of Midwich Group Plc (LON:MIDW) since 2010, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Midwich Group.

View our latest analysis for Midwich Group

How Does Total Compensation For Stephen Fenby Compare With Other Companies In The Industry?

At the time of writing, our data shows that Midwich Group Plc has a market capitalization of UK£306m, and reported total annual CEO compensation of UK£401k for the year to December 2019. We note that's a small decrease of 4.5% on last year. We note that the salary portion, which stands at UK£315.0k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations ranging from UK£154m to UK£617m, the reported median CEO total compensation was UK£694k. In other words, Midwich Group pays its CEO lower than the industry median. What's more, Stephen Fenby holds UK£73m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component

2019

2018

Proportion (2019)

Salary

UK£315k

UK£263k

79%

Other

UK£86k

UK£157k

21%

Total Compensation

UK£401k

UK£420k

100%

On an industry level, roughly 78% of total compensation represents salary and 22% is other remuneration. Midwich Group is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

ceo-compensation
ceo-compensation

A Look at Midwich Group Plc's Growth Numbers

Over the last three years, Midwich Group Plc has shrunk its earnings per share by 22% per year. Its revenue is up 7.8% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Midwich Group Plc Been A Good Investment?

With a three year total loss of 33% for the shareholders, Midwich Group Plc would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As we touched on above, Midwich Group Plc is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. While we are quite underwhelmed with EPS growth, the shareholder returns over the past three years have also failed to impress us. It's tough to say that Stephen is earning a very high compensation, but shareholders will likely want to see healthier investor returns before agreeing that a raise is in order.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 3 warning signs for Midwich Group that investors should look into moving forward.

Switching gears from Midwich Group, 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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