Does Fiske's (LON:FKE) CEO Salary Compare Well With The Performance Of The Company?

This article will reflect on the compensation paid to James Quibell Harrison who has served as CEO of Fiske plc (LON:FKE) since 2015. 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 Fiske

Comparing Fiske plc's CEO Compensation With the industry

According to our data, Fiske plc has a market capitalization of UK£7.6m, and paid its CEO total annual compensation worth UK£169k over the year to May 2020. That's a fairly small increase of 7.6% over the previous year. We note that the salary portion, which stands at UK£158.0k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the industry with market capitalizations below UK£150m, we found that the median total CEO compensation was UK£246k. That is to say, James Quibell Harrison is paid under the industry median. What's more, James Quibell Harrison holds UK£96k worth of shares in the company in their own name.

On an industry level, roughly 49% of total compensation represents salary and 51% is other remuneration. Fiske is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Fiske plc's Growth Numbers

Over the last three years, Fiske plc has shrunk its earnings per share by 86% per year. It achieved revenue growth of 24% over the last year.

The reduction in EPS, over three years, is arguably concerning. On the other hand, the strong revenue growth suggests the business is growing. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Fiske plc Been A Good Investment?

Given the total shareholder loss of 10% over three years, many shareholders in Fiske plc are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we noted earlier, Fiske pays its CEO lower than the norm for similar-sized companies belonging to the same industry. But shareholder returns and EPS growth over the past three years are negative, which is cause for concern. On the flip side, recent revenue growth has been positive. Although it's fair to say CEO compensation is modest, shareholders might want to see healthier investor returns before thinking James deserves a raise.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Fiske that investors should think about before committing capital to this stock.

Important note: Fiske 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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