A Quick Analysis On Springfield Properties' (LON:SPR) CEO Compensation

Innes Smith has been the CEO of Springfield Properties Plc (LON:SPR) since 2012, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Springfield Properties

How Does Total Compensation For Innes Smith Compare With Other Companies In The Industry?

Our data indicates that Springfield Properties Plc has a market capitalization of UK£132m, and total annual CEO compensation was reported as UK£247k for the year to May 2020. Notably, that's a decrease of 31% over the year before. In particular, the salary of UK£218.0k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations ranging from UK£74m to UK£295m, the reported median CEO total compensation was UK£247k. From this we gather that Innes Smith is paid around the median for CEOs in the industry. Furthermore, Innes Smith directly owns UK£1.3m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, around 60% of total compensation represents salary and 40% is other remuneration. Springfield Properties is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Springfield Properties Plc's Growth

Over the last three years, Springfield Properties Plc has shrunk its earnings per share by 4.9% per year. In the last year, its revenue is down 24%.

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. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Springfield Properties Plc Been A Good Investment?

We think that the total shareholder return of 33%, over three years, would leave most Springfield Properties Plc shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

As previously discussed, Innes is compensated close to the median for companies of its size, and which belong to the same industry. Some investors may take issue with this, especially considering shrinking EPS for the past three years. On the other hand, shareholder returns are showing positive trends over the same time frame. We wouldn't say CEO compensation is too high, but shareholders will probably want to see an increase in EPS before agreeing the business should pay any more.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 4 warning signs for Springfield Properties you should be aware of, and 2 of them make us uncomfortable.

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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