Stock Analysis

A Quick Analysis On Colefax Group's (LON:CFX) CEO Compensation

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David Green became the CEO of Colefax Group PLC (LON:CFX) in 1986, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Colefax Group.

View our latest analysis for Colefax Group

Comparing Colefax Group PLC's CEO Compensation With the industry

According to our data, Colefax Group PLC has a market capitalization of UK£39m, and paid its CEO total annual compensation worth UK£650k over the year to April 2020. We note that's a small decrease of 4.0% on last year. We note that the salary portion, which stands at UK£643.0k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below UK£148m, reported a median total CEO compensation of UK£301k. Hence, we can conclude that David Green is remunerated higher than the industry median. Furthermore, David Green directly owns UK£11m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20202019Proportion (2020)
Salary UK£643k UK£670k 99%
Other UK£7.0k UK£7.0k 1%
Total CompensationUK£650k UK£677k100%

On an industry level, roughly 60% of total compensation represents salary and 40% is other remuneration. Colefax Group has gone down a largely traditional route, paying David Green a high salary, giving it preference over non-salary benefits. 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.

AIM:CFX CEO Compensation December 28th 2020

A Look at Colefax Group PLC's Growth Numbers

Colefax Group PLC's earnings per share (EPS) grew 4.8% per year over the last three years. It saw its revenue drop 9.2% over the last year.

We generally like to see a little revenue growth, but the modest improvement in EPS is good. It's hard to reach a conclusion about business performance right now. This may be one to watch. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Colefax Group PLC Been A Good Investment?

Given the total shareholder loss of 15% over three years, many shareholders in Colefax Group PLC are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Colefax Group pays its CEO a majority of compensation through a salary. As we touched on above, Colefax Group PLC is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. The growth in the business has been uninspiring, but the shareholder returns for Colefax Group have arguably been worse, over the last three years. This doesn't look great when you consider David is taking home compensation north of the industry average. With such poor returns, we would understand if shareholders had concerns related to the CEO's pay.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 3 warning signs for Colefax Group (of which 1 is concerning!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Colefax Group, 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.

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Colefax Group

Colefax Group PLC, together with its subsidiaries, engages in the design, marketing, distribution, and retailing of furnishing fabrics, wallpapers, trimmings, upholstered furniture, and related products in the United Kingdom, the United States, rest of Europe, and internationally.

Flawless balance sheet with outstanding track record.