Is Marlowe plc (LON:MRL) Overpaying Its CEO?

The CEO of Marlowe plc (LON:MRL) is Alex Dacre. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Marlowe

How Does Alex Dacre's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Marlowe plc has a market cap of UK£180m, and reported total annual CEO compensation of UK£298k for the year to March 2019. It is worth noting that the CEO compensation consists almost entirely of the salary, worth UK£298k. We examined companies with market caps from UK£81m to UK£322m, and discovered that the median CEO total compensation of that group was UK£607k.

Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Marlowe stands. Speaking on an industry level, we can see that nearly 55% of total compensation represents salary, while the remainder of 45% is other remuneration. Marlowe pays out 100% of aggregate payment in the shape of a salary, which is significantly higher than the industry average.

At first glance this seems like a real positive for shareholders, since Alex Dacre is paid less than the average total compensation paid by similar sized companies. While this is a good thing, you'll need to understand the business better before you can form an opinion. You can see a visual representation of the CEO compensation at Marlowe, below.

Is Marlowe plc Growing?

Over the last three years Marlowe plc has seen earnings per share (EPS) move in a positive direction by an average of 47% per year (using a line of best fit). It achieved revenue growth of 60% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. You might want to check this free visual report on analyst forecasts for future earnings.

Has Marlowe plc Been A Good Investment?

Marlowe plc has generated a total shareholder return of 29% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

Marlowe plc is currently paying its CEO below what is normal for companies of its size.

Since the business is growing, many would argue this suggests the pay is modest. While returns over the last few years haven't been top notch, there is nothing to suggest to us that Alex Dacre is overcompensated. Few would complain about reasonable CEO remuneration when the business is growing earnings per share. It would be an additional positive if insiders are buying shares. Looking into other areas, we've picked out 3 warning signs for Marlowe that investors should think about before committing capital to this stock.

If you want to buy a stock that is better than Marlowe, this free list of high return, low debt companies is a great place to look.

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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