Why We Think The Fulham Shore PLC's (LON:FUL) CEO Compensation Is Not Excessive At All

The performance at The Fulham Shore PLC (LON:FUL) has been rather lacklustre of late and shareholders may be wondering what CEO Nabil Ayad Mankarious is planning to do about this. 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. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. In our opinion, CEO compensation does not look excessive and we discuss why.

Check out our latest analysis for Fulham Shore

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

Our data indicates that The Fulham Shore PLC has a market capitalization of UK£117m, and total annual CEO compensation was reported as UK£184k for the year to March 2021. Notably, that's a decrease of 36% over the year before. Notably, the salary which is UK£170.0k, represents most of the total compensation being paid.

On comparing similar companies from the same industry with market caps ranging from UK£73m to UK£293m, we found that the median CEO total compensation was UK£274k. Accordingly, Fulham Shore pays its CEO under 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%

On an industry level, roughly 82% of total compensation represents salary and 18% is other remuneration. Fulham Shore pays out 92% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at The Fulham Shore PLC's Growth Numbers

The Fulham Shore PLC has reduced its earnings per share by 115% a year over the last three years. In the last year, its revenue is down 41%.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet 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. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

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. That's why we did some digging and identified 1 warning sign for Fulham Shore that investors should think about before committing capital to this stock.

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. 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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