Performance at Caffyns plc (LON:CFYN) has been reasonably good and CEO Simon G. Caffyn has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 03 August 2021. We present our case of why we think CEO compensation looks fair.
How Does Total Compensation For Simon G. Caffyn Compare With Other Companies In The Industry?
Our data indicates that Caffyns plc has a market capitalization of UK£12m, and total annual CEO compensation was reported as UK£281k for the year to March 2021. That's a notable decrease of 12% on last year. Notably, the salary which is UK£252.0k, represents most of the total compensation being paid.
On comparing similar-sized companies in the industry with market capitalizations below UK£144m, we found that the median total CEO compensation was UK£388k. From this we gather that Simon G. Caffyn is paid around the median for CEOs in the industry. What's more, Simon G. Caffyn holds UK£346k worth of shares in the company in their own name.
On an industry level, around 80% of total compensation represents salary and 20% is other remuneration. Caffyns is paying a higher share of its remuneration through a salary in comparison to the overall industry. 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.
A Look at Caffyns plc's Growth Numbers
Caffyns plc has seen its earnings per share (EPS) increase by 11% a year over the past three years. It saw its revenue drop 16% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Caffyns plc Been A Good Investment?
Caffyns plc has served shareholders reasonably well, with a total return of 14% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Despite the pleasing results, we still think that any proposed increases to CEO compensation will be examined based on a case by case basis and linked to performance outcomes.
CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 3 warning signs for Caffyns (of which 2 make us uncomfortable!) that you should know about in order to have a holistic understanding of the stock.
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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