Is Highcroft Investments Plc’s (LON:HCFT) CEO Paid At A Competitive Rate?

Simon Gill became the CEO of Highcroft Investments Plc (LON:HCFT) in 2013. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for Highcroft Investments

How Does Simon Gill’s Compensation Compare With Similar Sized Companies?

According to our data, Highcroft Investments Plc has a market capitalization of UK£49m, and paid its CEO total annual compensation worth UK£209k over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at UK£108k. We examined a group of similar sized companies, with market capitalizations of below UK£153m. The median CEO total compensation in that group is UK£250k.

So Simon Gill receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.

The graphic below shows how CEO compensation at Highcroft Investments has changed from year to year.

LSE:HCFT CEO Compensation, January 28th 2020
LSE:HCFT CEO Compensation, January 28th 2020

Is Highcroft Investments Plc Growing?

Highcroft Investments Plc has reduced its earnings per share by an average of 4.9% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is up 7.2%.

Unfortunately, earnings per share have trended lower over the last three years. And the modest revenue growth over 12 months isn’t much comfort against the reduced earnings per share. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. Although we don’t have analyst forecasts you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Highcroft Investments Plc Been A Good Investment?

Highcroft Investments Plc has served shareholders reasonably well, with a total return of 21% over three years. 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.

In Summary…

Simon Gill is paid around the same as most CEOs of similar size companies.

We feel that earnings per share have been a bit disappointing, but and we don’t think the total returns are amazing. We do not think the CEO pay is a problem, but it’s probably fair to say that many shareholders would like to see improved performance, before any pay rise occurs. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Highcroft Investments (free visualization of insider trades).

Important note: Highcroft Investments may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

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