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How Should Investors Feel About Advanced Medical Solutions Group's (LON:AMS) CEO Remuneration?

This article will reflect on the compensation paid to Chris Meredith who has served as CEO of Advanced Medical Solutions Group plc (LON:AMS) since 2011. 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 Advanced Medical Solutions Group

Comparing Advanced Medical Solutions Group plc's CEO Compensation With the industry

Our data indicates that Advanced Medical Solutions Group plc has a market capitalization of UK£489m, and total annual CEO compensation was reported as UK£770k for the year to December 2019. That's a notable decrease of 14% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at UK£300k.

On examining similar-sized companies in the industry with market capitalizations between UK£301m and UK£1.2b, we discovered that the median CEO total compensation of that group was UK£768k. From this we gather that Chris Meredith is paid around the median for CEOs in the industry. Furthermore, Chris Meredith directly owns UK£3.4m worth of shares in the company, implying that they are deeply invested in the company's success.

Component

2019

2018

Proportion (2019)

Salary

UK£300k

UK£278k

39%

Other

UK£470k

UK£618k

61%

Total Compensation

UK£770k

UK£896k

100%

Speaking on an industry level, nearly 62% of total compensation represents salary, while the remainder of 38% is other remuneration. Advanced Medical Solutions Group pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
ceo-compensation

A Look at Advanced Medical Solutions Group plc's Growth Numbers

Advanced Medical Solutions Group plc has seen its earnings per share (EPS) increase by 5.6% a year over the past three years. Revenue was pretty flat on last year.

We generally like to see a little revenue growth, but the modest EPSgrowth gives us some relief. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 Advanced Medical Solutions Group plc Been A Good Investment?

With a three year total loss of 29% for the shareholders, Advanced Medical Solutions Group plc would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As previously discussed, Chris is compensated close to the median for companies of its size, and which belong to the same industry. Meanwhile, Advanced Medical Solutions Group is suffering from adverse shareholder returns and althoughEPS have grown over the past three years, they have not been extraordinary. We'd stop short of saying CEO compensation is inappropriate, but without an improvement in performance, it's sure to draw criticism. Shareholders will also not want to see performance improving before agreeing to any raise.

If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Advanced Medical Solutions Group.

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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