What We Learned About Pennant International Group's (LON:PEN) CEO Pay

Phil Walker became the CEO of Pennant International Group plc (LON:PEN) in 2017, 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 evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Pennant International Group

Comparing Pennant International Group plc's CEO Compensation With the industry

According to our data, Pennant International Group plc has a market capitalization of UK£14m, and paid its CEO total annual compensation worth UK£235k over the year to December 2019. We note that's an increase of 13% above last year. Notably, the salary which is UK£183.7k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under UK£155m, the reported median total CEO compensation was UK£191k. From this we gather that Phil Walker is paid around the median for CEOs in the industry.

Talking in terms of the industry, salary represented approximately 42% of total compensation out of all the companies we analyzed, while other remuneration made up 58% of the pie. Pennant International Group is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Pennant International Group plc's Growth Numbers

Pennant International Group plc has reduced its earnings per share by 91% a year over the last three years. It achieved revenue growth of 29% over the last year.

The decrease in EPS could be a concern for some investors. But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 Pennant International Group plc Been A Good Investment?

Given the total shareholder loss of 54% over three years, many shareholders in Pennant International Group plc are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As previously discussed, Phil is compensated close to the median for companies of its size, and which belong to the same industry. But revenue growth seems to be inching northward, a heartening sign for the company. Contrarily, shareholder returns are in the red over the same stretch. EPS is also not growing, undoubtedly leading to further headaches. Overall, we wouldn't say CEO is highly paid, but shareholders might not go for a raise before business metrics start to improve precipitously.

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. In our study, we found 2 warning signs for Pennant International Group you should be aware of, and 1 of them shouldn't be ignored.

Important note: Pennant International 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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