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Charlie Holland has been the CEO of Gusbourne PLC (LON:GUS) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Gusbourne

Comparing Gusbourne PLC's CEO Compensation With the industry

At the time of writing, our data shows that Gusbourne PLC has a market capitalization of UK£29m, and reported total annual CEO compensation of UK£101k for the year to December 2019. Notably, that's an increase of 22% over the year before. In particular, the salary of UK£96.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below UK£159m, reported a median total CEO compensation of UK£288k. Accordingly, Gusbourne pays its CEO under the industry median.

On an industry level, roughly 30% of total compensation represents salary and 70% is other remuneration. Gusbourne is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Gusbourne PLC's Growth

Gusbourne PLC has seen its earnings per share (EPS) increase by 11% a year over the past three years. Its revenue is up 31% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Gusbourne PLC Been A Good Investment?

With a total shareholder return of 26% over three years, Gusbourne PLC shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

Charlie receives almost all of their compensation through a salary. As previously discussed, Charlie is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. At the same time, earnings growth has been exceptional over the past three years. However, shareholder returns have failed to show the same level of growth. Shareholder returns could be better but we're pleased with the positive EPS growth. So it's fair to say Charlie has done quite well despite modest compensation and shareholders might not be averse to a raise.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 4 warning signs (and 2 which shouldn't be ignored) in Gusbourne we think you should know about.

Important note: Gusbourne is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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