Why Croma Security Solutions Group plc’s (LON:CSSG) CEO Pay Matters To You

Roberto Fiorentino became the CEO of Croma Security Solutions Group plc (LON:CSSG) in 2012. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Croma Security Solutions Group

How Does Roberto Fiorentino’s Compensation Compare With Similar Sized Companies?

According to our data, Croma Security Solutions Group plc has a market capitalization of UK£11m, and paid its CEO total annual compensation worth UK£239k over the year to June 2019. Notably, the salary of UK£236k is the vast majority of the CEO compensation. We took a group of companies with market capitalizations below UK£157m, and calculated the median CEO total compensation to be UK£268k.

Pay mix tells us a lot about how a company functions versus the wider industry, and it’s no different in the case of Croma Security Solutions Group. On a sector level, around 70% of total compensation represents salary and 30% is other remuneration. Croma Security Solutions Group is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits.

So Roberto Fiorentino is paid around the average of the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance. You can see, below, how CEO compensation at Croma Security Solutions Group has changed over time.

AIM:CSSG CEO Compensation June 8th 2020
AIM:CSSG CEO Compensation June 8th 2020

Is Croma Security Solutions Group plc Growing?

Over the last three years Croma Security Solutions Group plc has seen earnings per share (EPS) move in a positive direction by an average of 35% per year (using a line of best fit). In the last year, its revenue is down 5.2%.

This demonstrates that the company has been improving recently. A good result. The lack of revenue growth isn’t ideal, but it is the bottom line that counts most in business. 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 Croma Security Solutions Group plc Been A Good Investment?

Croma Security Solutions Group plc has generated a total shareholder return of 24% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary…

Remuneration for Roberto Fiorentino is close enough to the median pay for a CEO of a similar sized company .

Shareholder returns could be better but shareholders would be pleased with the positive EPS growth. So upon reflection one could argue that the CEO pay is quite reasonable. Moving away from CEO compensation for the moment, we’ve identified 3 warning signs for Croma Security Solutions Group that you should be aware of before investing.

Important note: Croma Security Solutions Group 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.

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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. Thank you for reading.