This article will reflect on the compensation paid to Richard Petti who has served as CEO of IQGeo Group plc (LON:IQG) since 2016. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for IQGeo Group

Comparing IQGeo Group plc's CEO Compensation With the industry

At the time of writing, our data shows that IQGeo Group plc has a market capitalization of UK£37m, and reported total annual CEO compensation of UK£330k for the year to December 2019. That's a notable decrease of 19% on last year. In particular, the salary of UK£225.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below UK£149m, reported a median total CEO compensation of UK£255k. From this we gather that Richard Petti is paid around the median for CEOs in the industry. Furthermore, Richard Petti directly owns UK£101k worth of shares in the company.

Component 2019 2018 Proportion (2019) Salary UK£225k UK£210k 68% Other UK£105k UK£196k 32% Total Compensation UK£330k UK£406k 100%

On an industry level, around 66% of total compensation represents salary and 34% is other remuneration. IQGeo Group is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. 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. ceo-compensation

A Look at IQGeo Group plc's Growth Numbers

Over the last three years, IQGeo Group plc has shrunk its earnings per share by 27% per year. It achieved revenue growth of 12% over the last year.

The decline in EPS is a bit concerning. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that EPS has gone backwards over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.



Has IQGeo Group plc Been A Good Investment?

Boasting a total shareholder return of 80% over three years, IQGeo Group plc has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

As we touched on above, IQGeo Group 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. This isn't great when you look at it against the backdrop of EPS growth, which has been negative for the past three years. On the flip side, shareholder returns have been strong over the same time, which is certainly a positive sign. We wouldn't say CEO compensation is too high, but shareholders will probably want to see an increase in EPS before agreeing the business should pay any more.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for IQGeo Group that you should be aware of before investing.

Switching gears from IQGeo Group, if you're hunting for a pristine balance sheet and premium returns, this freelist of high return, low debt companies is a great place to look.

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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