Shareholders may be wondering what CEO Mike Brennan plans to contribute to the less-than-great performance. to improve Norman Broadbent plc (LON: NBB) recently. At the next Annual General Meeting on June 25, 2021, they will have the opportunity to exercise their voting rights in order to influence the future direction of the company. Voting on executive compensation could be an effective way to influence management, as studies have shown that the right compensation incentives have an impact on business performance. We have prepared some analyzes below to show that the remuneration of the CEOs appears appropriate.
Check out our latest analysis for Norman Broadbent
How does Mike Brennan’s total compensation compare to other companies in the industry?
According to our data, Norman Broadbent plc has a market capitalization of Â£ 4.4m and paid its CEO total annual compensation of Â£ 201,000 through December 2020. We find that this is down 31% compared to last year. We find that the salary component, which is Â£ 184.0k, makes up the majority of the CEO’s total compensation.
When comparing companies of similar size in the industry with market capitalization less than Â£ 145 million, we found that the average total CEO compensation was Â£ 430,000. In other words, Norman Broadbent pays his CEO less than the industry average. In addition, Mike Brennan directly owns Â£ 90,000 worth of shares in the company.
|salary||UK Â£ 184k||UK Â£ 185k||92%|
|Other||â¬ 17,000||â¬ 107,000||8th%|
|Total compensation||UK Â£ 201k||â¬ 292,000||100%|
At the industry level, nearly 85% of total compensation is salary, while the remainder of 15% is other compensation. Our data shows that Norman Broadbent distributes salaries more or less according to the broader market. If salary is the main component of total compensation, it suggests that the CEO receive a higher fixed portion of total compensation regardless of performance.
A look at Norman Broadbent plc’s growth numbers
Norman Broadbent plc’s earnings per share (EPS) has increased 84% per year for the past three years. Last year sales fell by 32%.
Shareholders would be happy if the company has improved over the past few years. Sales growth would be good, but in the end, profits are more important. While we don’t have any analyst predictions for the company, shareholders should check out this detailed historical graph of earnings, revenue, and cash flow.
Was Norman Broadbent plc a good investment?
With a three year total loss to shareholders of 24%, Norman Broadbent plc would certainly have some dissatisfied shareholders. Hence, shareholders would likely want the company to be less generous with the CEO fee.
In summary …
The fact that shareholders generated negative stock price returns is certainly worrying. This is in contrast to robust EPS growth, which suggests that there is a huge gap between stock price and fundamentals. A key question could be why the fundamentals have not yet been reflected in the share price. At the upcoming AGM, shareholders should take this opportunity to voice these concerns to the Board of Directors and reconsider their investment thesis with respect to the company.
It is always advisable to analyze CEO salaries and do a thorough analysis of key performance areas of the company. We have identified 3 warning signs for Norman Broadbent (1 doesn’t go that well with us!) That you should know before investing here.
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This article from Simply Wall St is of a general nature. It is not a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our goal is to provide you with long-term, focused analysis based on fundamentals. Note that our analysis may not take into account the latest company announcements or quality material, which may be sensitive to the price. Simply Wall St has no position in the stocks mentioned.
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