Shaun Chilton has been the CEO of Clinigen Group plc (LON:CLIN) since 2016, 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 Clinigen Group.
Comparing Clinigen Group plc's CEO Compensation With the industry
Our data indicates that Clinigen Group plc has a market capitalization of UK£758m, and total annual CEO compensation was reported as UK£1.5m for the year to June 2020. That's a notable decrease of 42% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at UK£600k.
On comparing similar companies from the same industry with market caps ranging from UK£307m to UK£1.2b, we found that the median CEO total compensation was UK£2.6m. In other words, Clinigen Group pays its CEO lower than the industry median. Furthermore, Shaun Chilton directly owns UK£1.9m worth of shares in the company.
On an industry level, around 49% of total compensation represents salary and 51% is other remuneration. Clinigen Group sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Clinigen Group plc's Growth
Clinigen Group plc has seen its earnings per share (EPS) increase by 46% a year over the past three years. In the last year, its revenue is up 10%.
Shareholders would be glad to know that the company has improved itself over the last few years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Clinigen Group plc Been A Good Investment?
With a three year total loss of 48% for the shareholders, Clinigen Group plc would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.
As we touched on above, Clinigen 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. Importantly though, the company has impressed with its EPS growth over three years. Although we would've liked to see positive investor returns, it would be bold of us to criticize CEO compensation when EPS are up. But we believe shareholders would want to see healthier returns before the CEO gets a raise.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 3 warning signs for Clinigen Group (1 is significant!) that you should be aware of before investing here.
Important note: Clinigen 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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