The underwhelming share price performance of Trakm8 Holdings PLC (LON:TRAK) in the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. The AGM coming up on the 23 September 2021 could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.
See our latest analysis for Trakm8 Holdings
Comparing Trakm8 Holdings PLC's CEO Compensation With the industry
According to our data, Trakm8 Holdings PLC has a market capitalization of UK£10m, and paid its CEO total annual compensation worth UK£289k over the year to March 2021. There was no change in the compensation compared to last year. It is worth noting that the CEO compensation consists entirely of the salary, worth UK£289k.
For comparison, other companies in the industry with market capitalizations below UK£145m, reported a median total CEO compensation of UK£289k. This suggests that Trakm8 Holdings remunerates its CEO largely in line with the industry average. Moreover, John Watkins also holds UK£1.6m worth of Trakm8 Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, roughly 80% of total compensation represents salary and 20% is other remuneration. At the company level, Trakm8 Holdings pays John Watkins solely through a salary, preferring to go down a conventional route. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Trakm8 Holdings PLC's Growth
Trakm8 Holdings PLC's earnings per share (EPS) grew 7.6% per year over the last three years. It saw its revenue drop 18% over the last year.
We generally like to see a little revenue growth, but it is good to see a modest EPS growth at least. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 Trakm8 Holdings PLC Been A Good Investment?
With a total shareholder return of -66% over three years, Trakm8 Holdings PLC shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.
Trakm8 Holdings rewards its CEO solely through a salary, ignoring non-salary benefits completely. Shareholders have not seen their shares grow in value, rather they have seen their shares decline. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 3 warning signs for Trakm8 Holdings (1 makes us a bit uncomfortable!) that you should be aware of before investing here.
Important note: Trakm8 Holdings 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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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