How Should Investors Feel About City Pub Group's (LON:CPC) CEO Remuneration?

Rupert Clark became the CEO of The City Pub Group plc (LON:CPC) in 2014, 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 evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for City Pub Group

Comparing The City Pub Group plc's CEO Compensation With the industry

Our data indicates that The City Pub Group plc has a market capitalization of UK£91m, and total annual CEO compensation was reported as UK£161k for the year to December 2019. Notably, that's a decrease of 12% over the year before. Notably, the salary which is UK£145.0k, represents most of the total compensation being paid.

On comparing similar-sized companies in the industry with market capitalizations below UK£150m, we found that the median total CEO compensation was UK£225k. So it looks like City Pub Group compensates Rupert Clark in line with the median for the industry. Furthermore, Rupert Clark directly owns UK£535k worth of shares in the company.

Talking in terms of the industry, salary represented approximately 77% of total compensation out of all the companies we analyzed, while other remuneration made up 23% of the pie. City Pub Group pays out 90% of remuneration in the form of a salary, significantly higher than the industry average. 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.

A Look at The City Pub Group plc's Growth Numbers

The City Pub Group plc's earnings per share (EPS) grew 3.3% per year over the last three years. It saw its revenue drop 15% over the last year.

We would prefer it if there was revenue growth, but it is good to see a modest EPS growth at least. 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 The City Pub Group plc Been A Good Investment?

With a three year total loss of 50% for the shareholders, The City Pub Group plc would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we noted earlier, City Pub Group pays its CEO in line with similar-sized companies belonging to the same industry. But with negative shareholder returns and unimpressive EPS growth, shareholders will surely be disturbed. Although we wouldn't say CEO compensation is exceptionally high, it isn't very low either. Shareholders might want to see substantial improvements in returns before agreeing that Rupert deserves a raise.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 2 warning signs (and 1 which doesn't sit too well with us) in City Pub Group we think you should know about.

Important note: City Pub Group is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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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