Marnie-Jane Millard became the CEO of Nichols plc (LON:NICL) in 2013, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Nichols pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Check out our latest analysis for Nichols
Comparing Nichols plc's CEO Compensation With the industry
According to our data, Nichols plc has a market capitalization of UK£463m, and paid its CEO total annual compensation worth UK£587k over the year to December 2019. Notably, that's an increase of 17% over the year before. In particular, the salary of UK£356.0k, makes up a huge portion of the total compensation being paid to the CEO.
In comparison with other companies in the industry with market capitalizations ranging from UK£156m to UK£622m, the reported median CEO total compensation was UK£609k. From this we gather that Marnie-Jane Millard is paid around the median for CEOs in the industry. Furthermore, Marnie-Jane Millard directly owns UK£131k worth of shares in the company.
On an industry level, around 46% of total compensation represents salary and 54% is other remuneration. According to our research, Nichols has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
A Look at Nichols plc's Growth Numbers
Nichols plc has reduced its earnings per share by 11% a year over the last three years. In the last year, its revenue is down 9.5%.
Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. 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 Nichols plc Been A Good Investment?
Given the total shareholder loss of 22% over three years, many shareholders in Nichols plc are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
As we touched on above, Nichols plc is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. On the other hand, EPS growth and total shareholder return have been negative for the last three years. We'd stop short of saying compensation is inappropriate, but we would understand if shareholders had questions regarding a future raise.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Nichols that investors should think about before committing capital to this stock.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email email@example.com.