Here's Why We Think Hays plc's (LON:HAS) CEO Compensation Looks Fair

The performance at Hays plc (LON:HAS) has been rather lacklustre of late and shareholders may be wondering what CEO Alistair Cox is planning to do about this. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 10 November 2021. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

Check out our latest analysis for Hays

How Does Total Compensation For Alistair Cox Compare With Other Companies In The Industry?

Our data indicates that Hays plc has a market capitalization of UK£2.8b, and total annual CEO compensation was reported as UK£2.6m for the year to June 2021. We note that's an increase of 76% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at UK£768k.

In comparison with other companies in the industry with market capitalizations ranging from UK£1.5b to UK£4.7b, the reported median CEO total compensation was UK£4.2m. Accordingly, Hays pays its CEO under the industry median. What's more, Alistair Cox holds UK£7.0m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2021	2020	Proportion (2021)
Salary	UK£768k	UK£749k	30%
Other	UK£1.8m	UK£719k	70%
Total Compensation	UK£2.6m	UK£1.5m	100%

On an industry level, around 65% of total compensation represents salary and 35% is other remuneration. It's interesting to note that Hays allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Hays plc's Growth

Hays plc has reduced its earnings per share by 32% a year over the last three years. In the last year, its revenue is down 4.7%.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Hays plc Been A Good Investment?

Hays plc has served shareholders reasonably well, with a total return of 16% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

Despite the positive returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. These concerns could be addressed to the board and shareholders should revisit their investment thesis to see if it still makes sense.

Shareholders may want to check for free if Hays insiders are buying or selling shares.

Switching gears from Hays, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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