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How Does Solid State's (LON:SOLI) CEO Salary Compare to Peers?

Gary Marsh has been the CEO of Solid State plc (LON:SOLI) since 2011, 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 Solid State.

View our latest analysis for Solid State

Comparing Solid State plc's CEO Compensation With the industry

Our data indicates that Solid State plc has a market capitalization of UK£50m, and total annual CEO compensation was reported as UK£427k for the year to March 2020. Notably, that's an increase of 60% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at UK£175k.

For comparison, other companies in the industry with market capitalizations below UK£156m, reported a median total CEO compensation of UK£225k. This suggests that Gary Marsh is paid more than the median for the industry. Moreover, Gary Marsh also holds UK£1.7m worth of Solid State stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component

2020

2019

Proportion (2020)

Salary

UK£175k

UK£163k

41%

Other

UK£252k

UK£104k

59%

Total Compensation

UK£427k

UK£267k

100%

Speaking on an industry level, nearly 79% of total compensation represents salary, while the remainder of 21% is other remuneration. Solid State pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
ceo-compensation

A Look at Solid State plc's Growth Numbers

Over the past three years, Solid State plc has seen its earnings per share (EPS) grow by 14% per year. Its revenue is up 20% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Solid State plc Been A Good Investment?

With a total shareholder return of 29% over three years, Solid State plc shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

As we touched on above, Solid State plc is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, the EPS growth over three years is certainly impressive. Looking at the same time period, we think that the shareholder returns are respectable. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn't say CEO compensation problematic.

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 1 warning sign for Solid State that investors should look into moving forward.

Important note: Solid State 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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