Is Cloudcall Group plc (LON:CALL) Overpaying Its CEO?
In 2016 Simon Cleaver was appointed CEO of Cloudcall Group plc (LON:CALL). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
See our latest analysis for Cloudcall Group
How Does Simon Cleaver's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Cloudcall Group plc has a market cap of UK£28m, and reported total annual CEO compensation of UK£194k for the year to December 2018. It is worth noting that the CEO compensation consists almost entirely of the salary, worth UK£192k. We looked at a group of companies with market capitalizations under UK£161m, and the median CEO total compensation was UK£268k.
Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Cloudcall Group stands. Speaking on an industry level, we can see that nearly 72% of total compensation represents salary, while the remainder of 28% is other remuneration. Cloudcall Group pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay.
So Simon Cleaver receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance. The graphic below shows how CEO compensation at Cloudcall Group has changed from year to year.
Is Cloudcall Group plc Growing?
On average over the last three years, Cloudcall Group plc has seen earnings per share (EPS) move in a favourable direction by 22% each year (using a line of best fit). Its revenue is up 29% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. It could be important to check this free visual depiction of what analysts expect for the future.
Has Cloudcall Group plc Been A Good Investment?
With a three year total loss of 26%, Cloudcall Group plc would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary...
Simon Cleaver is paid around what is normal for the leaders of comparable size companies.
We think that the EPS growth is very pleasing, but we find the returns over the last three years to be lacking. Considering the the positives we don't think the CEO pays is too high, but it's certainly hard to argue it is too low. Shifting gears from CEO pay for a second, we've spotted 6 warning signs for Cloudcall Group you should be aware of, and 2 of them don't sit too well with us.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
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