Here's What We Think About ADVFN's (LON:AFN) CEO Pay

By
Simply Wall St
Published
November 25, 2020
AIM:AFN

Clem Chambers is the CEO of ADVFN Plc (LON:AFN), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for ADVFN

How Does Total Compensation For Clem Chambers Compare With Other Companies In The Industry?

According to our data, ADVFN Plc has a market capitalization of UK£4.0m, and paid its CEO total annual compensation worth UK£271k over the year to June 2020. Notably, that's a decrease of 31% over the year before. Notably, the salary which is UK£235.0k, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below UK£149m, reported a median total CEO compensation of UK£243k. So it looks like ADVFN compensates Clem Chambers in line with the median for the industry. Moreover, Clem Chambers also holds UK£93k worth of ADVFN stock directly under their own name.

Component20202019Proportion (2020)
Salary UK£235k UK£342k 87%
Other UK£36k UK£53k 13%
Total CompensationUK£271k UK£395k100%

Speaking on an industry level, nearly 49% of total compensation represents salary, while the remainder of 51% is other remuneration. ADVFN is paying a higher share of its remuneration through a salary in comparison to the overall industry. 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.

ceo-compensation
AIM:AFN CEO Compensation November 26th 2020

ADVFN Plc's Growth

Over the last three years, ADVFN Plc has shrunk its earnings per share by 96% per year. Its revenue is down 19% over the previous year.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. 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 ADVFN Plc Been A Good Investment?

Given the total shareholder loss of 69% over three years, many shareholders in ADVFN Plc are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As we touched on above, ADVFN Plc is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Meanwhile, EPS growth and shareholder returns have been in the red for the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for ADVFN that you should be aware of before investing.

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. 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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