Most Shareholders Will Probably Find That The Compensation For The Fulham Shore PLC's (LON:FUL) CEO Is Reasonable

Shareholders may be wondering what CEO Nabil Ayad Mankarious plans to do to improve the less than great performance at The Fulham Shore PLC (LON:FUL) recently. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 29 September 2021. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

View our latest analysis for Fulham Shore

Comparing The Fulham Shore PLC's CEO Compensation With the industry

According to our data, The Fulham Shore PLC has a market capitalization of UK£117m, and paid its CEO total annual compensation worth UK£184k over the year to March 2021. Notably, that's a decrease of 36% over the year before. We note that the salary portion, which stands at UK£170.0k constitutes the majority of total compensation received by the CEO.

On examining similar-sized companies in the industry with market capitalizations between UK£73m and UK£293m, we discovered that the median CEO total compensation of that group was UK£274k. In other words, Fulham Shore pays its CEO lower than the industry median. What's more, Nabil Ayad Mankarious holds UK£22m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2021	2020	Proportion (2021)
Salary	UK£170k	UK£212k	92%
Other	UK£14k	UK£74k	8%
Total Compensation	UK£184k	UK£286k	100%

Speaking on an industry level, nearly 82% of total compensation represents salary, while the remainder of 18% is other remuneration. According to our research, Fulham Shore has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

The Fulham Shore PLC's Growth

Over the last three years, The Fulham Shore PLC has shrunk its earnings per share by 115% per year. Its revenue is down 41% over the previous year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has The Fulham Shore PLC Been A Good Investment?

Boasting a total shareholder return of 64% over three years, The Fulham Shore PLC has done well by shareholders. 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.

In Summary...

While the return to shareholders does look promising, it's hard to ignore the lack of earnings growth and this makes us wonder if these strong returns can continue. Shareholders might want to question the board about these concerns, and revisit their investment thesis for the company.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for Fulham Shore that investors should be aware of in a dynamic business environment.

Switching gears from Fulham Shore, 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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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