What Does FIH group's (LON:FIH) CEO Pay Reveal?

This article will reflect on the compensation paid to John Foster who has served as CEO of FIH group plc (LON:FIH) since 2005. This analysis will also assess whether FIH group pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for FIH group

How Does Total Compensation For John Foster Compare With Other Companies In The Industry?

Our data indicates that FIH group plc has a market capitalization of UK£29m, and total annual CEO compensation was reported as UK£224k for the year to March 2020. We note that's a decrease of 12% compared to last year. In particular, the salary of UK£222.0k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the industry with market capitalizations below UK£146m, we found that the median total CEO compensation was UK£242k. So it looks like FIH group compensates John Foster in line with the median for the industry. Moreover, John Foster also holds UK£212k worth of FIH group stock directly under their own name.

Speaking on an industry level, nearly 56% of total compensation represents salary, while the remainder of 44% is other remuneration. FIH group pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

FIH group plc's Growth

Over the last three years, FIH group plc has shrunk its earnings per share by 87% per year. It saw its revenue drop 6.7% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has FIH group plc Been A Good Investment?

Since shareholders would have lost about 23% over three years, some FIH group plc investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

John receives almost all of their compensation through a salary. As we noted earlier, FIH group pays its CEO in line with similar-sized companies belonging to the same industry. On the other hand, EPS growth and total shareholder return have been negative for the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 3 warning signs (and 2 which shouldn't be ignored) in FIH group we think you should know about.

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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