Stock Analysis

Shareholders Will Probably Hold Off On Increasing Crest Nicholson Holdings plc's (LON:CRST) CEO Compensation For The Time Being

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Key Insights

  • Crest Nicholson Holdings' Annual General Meeting to take place on 23rd of March
  • Salary of UK£666.0k is part of CEO Peter Truscott's total remuneration
  • The overall pay is 70% above the industry average
  • Crest Nicholson Holdings' total shareholder return over the past three years was 31% while its EPS was down 32% over the past three years

Performance at Crest Nicholson Holdings plc (LON:CRST) has been reasonably good and CEO Peter Truscott has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 23rd of March, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders will still be cautious of paying the CEO excessively.

See our latest analysis for Crest Nicholson Holdings

How Does Total Compensation For Peter Truscott Compare With Other Companies In The Industry?

According to our data, Crest Nicholson Holdings plc has a market capitalization of UK£540m, and paid its CEO total annual compensation worth UK£1.8m over the year to October 2022. That's a notable increase of 24% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at UK£666k.

In comparison with other companies in the British Consumer Durables industry with market capitalizations ranging from UK£330m to UK£1.3b, the reported median CEO total compensation was UK£1.0m. This suggests that Peter Truscott is paid more than the median for the industry. Moreover, Peter Truscott also holds UK£875k worth of Crest Nicholson Holdings stock directly under their own name.

Component20222021Proportion (2022)
Salary UK£666k UK£650k 38%
Other UK£1.1m UK£772k 62%
Total CompensationUK£1.8m UK£1.4m100%

Talking in terms of the industry, salary represented approximately 41% of total compensation out of all the companies we analyzed, while other remuneration made up 59% of the pie. Our data reveals that Crest Nicholson Holdings allocates salary more or less in line with the wider market. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

LSE:CRST CEO Compensation March 17th 2023

A Look at Crest Nicholson Holdings plc's Growth Numbers

Over the last three years, Crest Nicholson Holdings plc has shrunk its earnings per share by 32% per year. Its revenue is up 16% over the last year.

The reduction in EPS, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 Crest Nicholson Holdings plc Been A Good Investment?

Crest Nicholson Holdings plc has generated a total shareholder return of 31% 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.

To Conclude...

The overall company performance has been commendable, however there are still areas for improvement. Until EPS growth picks back up, we think shareholders may find it hard to justify increasing CEO pay given that they are already paid above industry average.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 3 warning signs for Crest Nicholson Holdings that you should be aware of before investing.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

Valuation is complex, but we're helping make it simple.

Find out whether Crest Nicholson Holdings is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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