In 2005 Kiran Shah was appointed CEO of The Character Group plc (LON:CCT). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Kiran Shah’s Compensation Compare With Similar Sized Companies?
Our data indicates that The Character Group plc is worth UK£115m, and total annual CEO compensation is UK£870k. (This is based on the year to August 2018). While we always look at total compensation first, we note that the salary component is less, at UK£246k. We took a group of companies with market capitalizations below UK£153m, and calculated the median CEO compensation to be UK£236k.
Thus we can conclude that Kiran Shah receives more in total compensation than the median of a group of companies in the same market, and of similar size to The Character Group plc. However, this doesn’t necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at Character Group has changed over time.
Is The Character Group plc Growing?
The Character Group plc has reduced its earnings per share by an average of 11% a year, over the last three years (measured with a line of best fit). Its revenue is down -7.9% over last year.
Sadly for shareholders, earnings per share are actually down, over three years. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has The Character Group plc Been A Good Investment?
The Character Group plc has generated a total shareholder return of 21% over three years, so most shareholders would be reasonably content. 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.
We examined the amount The Character Group plc pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.
While shareholder returns are acceptable, they don’t delight. So we think more research is needed, but we don’t think the CEO underpaid. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Character Group.
If you want to buy a stock that is better than Character Group, this free list of high return, low debt companies is a great place to look.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Thank you for reading.