How Should Investors React To Charles Stanley Group’s (LON:CAY) CEO Pay?

Paul Abberley has been the CEO of Charles Stanley Group PLC (LON:CAY) since 2014, and this article will examine the executive’s compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Charles Stanley Group.

View our latest analysis for Charles Stanley Group

How Does Total Compensation For Paul Abberley Compare With Other Companies In The Industry?

According to our data, Charles Stanley Group PLC has a market capitalization of UK£127m, and paid its CEO total annual compensation worth UK£785k over the year to March 2020. That’s a fairly small increase of 4.8% over the previous year. While we always look at total compensation first, our analysis shows that the salary component is less, at UK£379k.

On examining similar-sized companies in the industry with market capitalizations between UK£80m and UK£321m, we discovered that the median CEO total compensation of that group was UK£556k. Accordingly, our analysis reveals that Charles Stanley Group PLC pays Paul Abberley north of the industry median. Moreover, Paul Abberley also holds UK£261k worth of Charles Stanley Group stock directly under their own name.

Component20202019Proportion (2020)
Salary UK£379k UK£362k 48%
Other UK£406k UK£387k 52%
Total CompensationUK£785k UK£749k100%

Talking in terms of the industry, salary represented approximately 69% of total compensation out of all the companies we analyzed, while other remuneration made up 31% of the pie. Charles Stanley Group sets aside a smaller share of compensation for salary, in comparison to the overall industry. It’s important to note that a slant towards non-salary compensation suggests that total pay is tied to the company’s performance.

LSE:CAY CEO Compensation July 3rd 2020
LSE:CAY CEO Compensation July 3rd 2020

A Look at Charles Stanley Group PLC’s Growth Numbers

Charles Stanley Group PLC’s earnings per share (EPS) grew 31% per year over the last three years. In the last year, its revenue is up 11%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Charles Stanley Group PLC Been A Good Investment?

With a three year total loss of 27% for the shareholders, Charles Stanley Group PLC would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

As we touched on above, Charles Stanley Group PLC is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, the earnings per share growth is certainly impressive, but it’s disappointing to see negative shareholder returns over the same period. Although we’d stop short of calling it inappropriate, we think Paul is earning a very handsome sum.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We’ve identified 1 warning sign for Charles Stanley Group that investors should be aware of in a dynamic business environment.

Important note: Charles Stanley Group 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.

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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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