What We Learned About Rosslyn Data Technologies' (LON:RDT) CEO Pay

Roger Bullen became the CEO of Rosslyn Data Technologies plc (LON:RDT) in 2016, 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 look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Rosslyn Data Technologies.

See our latest analysis for Rosslyn Data Technologies

How Does Total Compensation For Roger Bullen Compare With Other Companies In The Industry?

At the time of writing, our data shows that Rosslyn Data Technologies plc has a market capitalization of UK£20m, and reported total annual CEO compensation of UK£216k for the year to April 2020. That's a notable increase of 23% on last year. Notably, the salary which is UK£160.0k, represents most of the total compensation being paid.

On comparing similar-sized companies in the industry with market capitalizations below UK£155m, we found that the median total CEO compensation was UK£273k. So it looks like Rosslyn Data Technologies compensates Roger Bullen in line with the median for the industry. What's more, Roger Bullen holds UK£148k worth of shares in the company in their own name.

Talking in terms of the industry, salary represented approximately 66% of total compensation out of all the companies we analyzed, while other remuneration made up 34% of the pie. Rosslyn Data Technologies pays out 74% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Rosslyn Data Technologies plc's Growth

Rosslyn Data Technologies plc has seen its earnings per share (EPS) increase by 49% a year over the past three years. In the last year, its revenue is up 2.1%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. 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 Rosslyn Data Technologies plc Been A Good Investment?

Given the total shareholder loss of 14% over three years, many shareholders in Rosslyn Data Technologies plc are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

As we noted earlier, Rosslyn Data Technologies pays its CEO in line with similar-sized companies belonging to the same industry. At the same time, the company has logged negative shareholder returns over the last three years. But EPS growth is moving in a favorable direction, certainly a positive sign. It's tough for us to say CEO compensation is too generous when EPS growth is positive, but negative investor returns will irk shareholders and reduce any chances of a raise.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 3 warning signs for Rosslyn Data Technologies (of which 1 is a bit unpleasant!) that you should know about in order to have a holistic understanding of the stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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