Leader Exemplary Remuneration at Judges Scientific

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I recently commented negatively on the remuneration section of the Annual Reports of Greggs and Avast. Today I read another Annual Report from Judges Scientific (JDG) and it’s a completely different story.

I have held shares in this company which is a scientific instrument maker since 2010. The share price then was 327p. It’s now 4940p. Led by CEO David Cicurel in that period, as the Annual Report says the “Management is focused on shareholder value – profitability, cash generation, debt reduction, dividend growth and return on capital”. Return on Total Invested Capital last year was 31.4% and according to ShareScope my compound annual return from holding the shares has been 25.6% per annum.

What more could shareholders want? Perhaps a directors’ remuneration scheme that is simple and reasonable! Judges certainly meets that requirement.

The Remuneration Report is only 3 pages which is all we could wish for. For executive directors there is a reasonable base salary plus an annual bonus of 25% of salary if earnings per share targets are met and are higher than a previous high watermark. They also receive share options issued at market value (not at zero cost note), and there is also a performance condition attached to those.

In total the remuneration of all directors, including the non-executives, was £816,000 when post-tax profits were about £11 million. The CEO received £243,000. Another good point is that there is a vote on remuneration at the AGM which many AIM companies choose to omit. I don’t think there will be many Judges shareholders voting against that resolution.

Why cannot all public companies have such simple remuneration schemes? And with a level of remuneration that is not excessive?

Roger Lawson (Twitter: https://twitter.com/RogerWLawson )

3 Comments
  1. Michael Darbyshire says:

    Sounds almost too good to be true! I totally agree with your sentiments.

  2. jffcarter says:

    I agree, especially when share options are issued at zero cost instead of the market value at date of issue.

  3. NEIL MICKLETHWAITE says:

    Perhaps you or someone else at Sharesoc could publish a list of the companies they’ve come across that have similar remuneration schemes that truly do try to ensure the interests of management and shareholders are in sync. I suspect it would be a very short list, but I would certainly be interested in seeing the companies that passed this criteria.

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