Yahoo Finance How Should Investors Feel About Walker Crips Group's (LON:WCW) CEO Remuneration?
Sean Lam became the CEO of Walker Crips Group plc (LON:WCW) in 2017, 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 look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Walker Crips Group.
Check out our latest analysis for Walker Crips Group
How Does Total Compensation For Sean Lam Compare With Other Companies In The Industry?
At the time of writing, our data shows that Walker Crips Group plc has a market capitalization of UK£11m, and reported total annual CEO compensation of UK£246k for the year to March 2020. This means that the compensation hasn't changed much from last year. In particular, the salary of UK£220.0k, makes up a huge portion of the total compensation being paid to the CEO.
In comparison with other companies in the industry with market capitalizations under UK£154m, the reported median total CEO compensation was UK£252k. This suggests that Walker Crips Group remunerates its CEO largely in line with the industry average. Moreover, Sean Lam also holds UK£179k worth of Walker Crips Group stock directly under their own name.
Component | 2020 | 2019 | Proportion (2020) |
Salary | UK£220k | UK£220k | 90% |
Other | UK£26k | UK£26k | 10% |
Total Compensation | UK£246k | UK£246k | 100% |
On an industry level, around 49% of total compensation represents salary and 51% is other remuneration. Walker Crips Group is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at Walker Crips Group plc's Growth Numbers
Walker Crips Group plc's earnings per share (EPS) grew 4.6% per year over the last three years. It achieved revenue growth of 2.5% over the last year.
We would argue that the improvement in revenue is good, but isn't particularly impressive, but the modest improvement in EPS is good. So there are some positives here, but not enough to earn high praise. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Walker Crips Group plc Been A Good Investment?
Given the total shareholder loss of 40% over three years, many shareholders in Walker Crips Group plc are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.
To Conclude...
As previously discussed, Sean is compensated close to the median for companies of its size, and which belong to the same industry. 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.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for Walker Crips Group that you should be aware of before investing.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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