Philip Kirkham became the CEO of Hardide plc (LON:HDD) in 2012, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

View our latest analysis for Hardide

Comparing Hardide plc's CEO Compensation With the industry

At the time of writing, our data shows that Hardide plc has a market capitalization of UK£18m, and reported total annual CEO compensation of UK£191k for the year to September 2020. Notably, that's a decrease of 12% over the year before. Notably, the salary of UK£191k is the entirety of the CEO compensation.

In comparison with other companies in the industry with market capitalizations under UK£142m, the reported median total CEO compensation was UK£216k. From this we gather that Philip Kirkham is paid around the median for CEOs in the industry.

On an industry level, around 65% of total compensation represents salary and 35% is other remuneration. At the company level, Hardide pays Philip Kirkham solely through a salary, preferring to go down a conventional route. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Hardide plc's Growth

Over the past three years, Hardide plc has seen its earnings per share (EPS) grow by 2.5% per year. In the last year, its revenue is down 5.9%.

We would argue that the lack of revenue growth in the last year is less than ideal, but the modest improvement in EPS is good. It's hard to reach a conclusion about business performance right now. This may be one to watch. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Hardide plc Been A Good Investment?

Since shareholders would have lost about 54% over three years, some Hardide plc investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Hardide pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As we touched on above, Hardide plc is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But with negative shareholder returns and unimpressive EPS growth, shareholders will surely be disturbed. We'd stop short of saying CEO compensation is inappropriate, but without an improvement in performance, it's sure to draw criticism. Shareholders will also not want to see performance improving before agreeing to any raise.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 5 warning signs for Hardide you should be aware of, and 1 of them can't be ignored.

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.

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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