Is Fletcher King Plc (LON:FLK) Excessively Paying Its CEO?
In 2007 Richard Eric Goode was appointed CEO of Fletcher King Plc (LON:FLK). First, this article will compare CEO compensation with compensation at similar sized companies. 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. This method should give us information to assess how appropriately the company pays the CEO.
See our latest analysis for Fletcher King
How Does Richard Eric Goode's Compensation Compare With Similar Sized Companies?
Our data indicates that Fletcher King Plc is worth UK£3.9m, and total annual CEO compensation is UK£198k. (This is based on the year to April 2018). We think total compensation is more important but we note that the CEO salary is lower, at UK£100k. We examined a group of similar sized companies, with market capitalizations of below UK£165m. The median CEO total compensation in that group is UK£252k.
So Richard Eric Goode 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 Fletcher King has changed from year to year.
Is Fletcher King Plc Growing?
Over the last three years Fletcher King Plc has shrunk its earnings per share by an average of 46% per year (measured with a line of best fit). In the last year, its revenue changed by just -0.9%.
Sadly for shareholders, earnings per share are actually down, over three years. And the flat revenue is seriously uninspiring. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Fletcher King Plc Been A Good Investment?
Fletcher King Plc has not done too badly by shareholders, with a total return of 7.9%, over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
In Summary...
Richard Eric Goode is paid around the same as most CEOs of similar size companies.
The company isn't growing earnings per share, and nor have the total returns inspired us. We do not think the CEO pay is a problem, but one might argue that the company should improve returns to shareholders before increasing it. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Fletcher King (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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. Thank you for reading.
