Paul Smith is the CEO of Morses Club PLC (LON:MCL). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Paul Smith’s Compensation Compare With Similar Sized Companies?
Our data indicates that Morses Club PLC is worth UK£173m, and total annual CEO compensation is UK£709k. (This is based on the year to February 2019). That’s a notable increase of 40% on last year. While we always look at total compensation first, we note that the salary component is less, at UK£293k. When we examined a selection of companies with market caps ranging from UK£81m to UK£323m, we found the median CEO total compensation was UK£538k.
As you can see, Paul Smith is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Morses Club PLC is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see a visual representation of the CEO compensation at Morses Club, below.
Is Morses Club PLC Growing?
On average over the last three years, Morses Club PLC has grown earnings per share (EPS) by 32% each year (using a line of best fit). In the last year, its revenue changed by just 0.2%.
This demonstrates that the company has been improving recently. A good result. It’s nice to see a little revenue growth, as this is consistent with healthy business conditions.
Has Morses Club PLC Been A Good Investment?
Most shareholders would probably be pleased with Morses Club PLC for providing a total return of 39% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We examined the amount Morses Club PLC pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. On top of that, in the same period, returns to shareholders have been great. As a result of this good performance, the CEO remuneration may well be quite reasonable. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Morses Club (free visualization of insider trades).
If you want to buy a stock that is better than Morses Club, this free list of high return, low debt companies is a great place to look.
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