In 2009 Andrew Day was appointed CEO of Keywords Studios plc (LON:KWS). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Andrew Day's Compensation Compare With Similar Sized Companies?
According to our data, Keywords Studios plc has a market capitalization of UK£985m, and paid its CEO total annual compensation worth €252k over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at €230k. When we examined a selection of companies with market caps ranging from €902m to €2.9b, we found the median CEO total compensation was €1.6m.
A first glance this seems like a real positive for shareholders, since Andrew Day is paid less than the average total compensation paid by similar sized companies. While this is a good thing, you'll need to understand the business better before you can form an opinion.
You can see a visual representation of the CEO compensation at Keywords Studios, below.
Is Keywords Studios plc Growing?
Keywords Studios plc has increased its earnings per share (EPS) by an average of 28% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 49%.
This demonstrates that the company has been improving recently. A good result. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Shareholders might be interested in this free visualization of analyst forecasts.
Has Keywords Studios plc Been A Good Investment?
Boasting a total shareholder return of 197% over three years, Keywords Studios plc has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
It appears that Keywords Studios plc remunerates its CEO below most similar sized companies.
Since the business is growing, many would argue this suggests the pay is modest. The strong history of shareholder returns might even have some thinking that Andrew Day deserves a raise! Most shareholders like to see a modestly paid CEO combined with strong performance by the company. But it is even better if company insiders are also buying shares with their own money. Whatever your view on compensation, you might want to check if insiders are buying or selling Keywords Studios shares (free trial).
If you want to buy a stock that is better than Keywords Studios, this free list of high return, low debt companies is a great place to look.
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