The CEO of James Halstead plc (LON:JHD) is Mark Halstead, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether James Halstead pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Check out our latest analysis for James Halstead
How Does Total Compensation For Mark Halstead Compare With Other Companies In The Industry?
Our data indicates that James Halstead plc has a market capitalization of UK£1.0b, and total annual CEO compensation was reported as UK£445k for the year to June 2020. That's a modest increase of 4.0% on the prior year. It is worth noting that the CEO compensation consists entirely of the salary, worth UK£445k.
On comparing similar companies from the same industry with market caps ranging from UK£731m to UK£2.3b, we found that the median CEO total compensation was UK£1.2m. Accordingly, James Halstead pays its CEO under the industry median. Furthermore, Mark Halstead directly owns UK£123m worth of shares in the company, implying that they are deeply invested in the company's success.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | UK£445k | UK£428k | 100% |
| Other | - | - | - |
| Total Compensation | UK£445k | UK£428k | 100% |
On an industry level, roughly 64% of total compensation represents salary and 36% is other remuneration. On a company level, James Halstead prefers to reward its CEO through a salary, opting not to pay Mark Halstead through non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
James Halstead plc's Growth
Over the last three years, James Halstead plc has shrunk its earnings per share by 2.1% per year. It saw its revenue drop 5.7% over the last year.
Its a bit disappointing to see that the company has failed to grow its EPS. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has James Halstead plc Been A Good Investment?
With a total shareholder return of 28% over three years, James Halstead plc shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
To Conclude...
James Halstead pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As previously discussed, Mark is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. Shareholder returns have been uninspiring, but EPS growth has arguably been worse, over the last three years. It's tough for us to say that Mark is earning a high compensation, but any bump in pay is unlikely at this stage since shareholders will likely hold off support until performance improves.
Whatever your view on compensation, you might want to check if insiders are buying or selling James Halstead shares (free trial).
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.
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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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About AIM:JHD
James Halstead
Manufactures and supplies flooring products for commercial and domestic uses in the United Kingdom, rest of Europe, Scandinavia, Australasia, Asia, and internationally.
Flawless balance sheet established dividend payer.
