AIM:TYM Past Future Earnings Mar 16th 18
Is TYM’s CEO overpaid relative to the market?
Even though one size does not fit all, since compensation should be tailored to the specific company and market, we can evaluate a high-level base line to see if TYM is an outlier. This exercise can help direct shareholders to ask the right question about Clemmey’s incentive alignment. On average, a UK small-cap is worth around £696M, creates earnings of £67M, and remunerates its CEO at roughly £1M per year. Typically I would look at market cap and earnings as a proxy for performance, however, TYM’s negative earnings reduces the usefulness of my formula. Given the range of pay for small-cap executives, it seems like Clemmey is being paid within the bounds of reasonableness. Overall, even though TYM is unprofitable, it seems like the CEO’s pay is reflective of the appropriate level.
Next Steps:
Board members are the voice of shareholders. Although CEO pay doesn’t necessarily make a big dent in your investment thesis in TYM, proper governance on behalf of your investment should be a key concern. These decisions made by top management and directors flow down into financials which impact returns to investors. If you have not done so already, I highly recommend you to complete your research by taking a look at the following:
- Governance: To find out more about TYM’s governance, look through our infographic report of the company’s board and management.
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of TYM? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.