Shareholders Will Probably Hold Off On Increasing Escape Hunt plc's (LON:ESC) CEO Compensation For The Time Being

In the past three years, the share price of Escape Hunt plc (LON:ESC) has struggled to grow and now shareholders are sitting on a loss. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 28 June 2021. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

Check out our latest analysis for Escape Hunt

How Does Total Compensation For Richard Harpham Compare With Other Companies In The Industry?

At the time of writing, our data shows that Escape Hunt plc has a market capitalization of UK£34m, and reported total annual CEO compensation of UK£220k for the year to December 2020. We note that's a decrease of 8.3% compared to last year. In particular, the salary of UK£198.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below UK£145m, reported a median total CEO compensation of UK£230k. From this we gather that Richard Harpham is paid around the median for CEOs in the industry. Moreover, Richard Harpham also holds UK£272k worth of Escape Hunt stock directly under their own name.

Component	2020	2019	Proportion (2020)
Salary	UK£198k	UK£220k	90%
Other	UK£22k	UK£20k	10%
Total Compensation	UK£220k	UK£240k	100%

On an industry level, roughly 81% of total compensation represents salary and 19% is other remuneration. Escape Hunt is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Escape Hunt plc's Growth Numbers

Over the past three years, Escape Hunt plc has seen its earnings per share (EPS) grow by 22% per year. It saw its revenue drop 46% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Escape Hunt plc Been A Good Investment?

Few Escape Hunt plc shareholders would feel satisfied with the return of -66% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

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 6 warning signs for Escape Hunt you should be aware of, and 3 of them are significant.

Switching gears from Escape Hunt, 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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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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