Phillip Wale has been the CEO of WH Ireland Group plc ( LON:WHI ) since 2018, and this article will examine the executive's compensation 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 WH Ireland Group
How Does Total Compensation For Phillip Wale Compare With Other Companies In The Industry?
At the time of writing, our data shows that WH Ireland Group plc has a market capitalization of UK£28m, and reported total annual CEO compensation of UK£396k for the year to March 2020. We note that's a decrease of 8.6% compared to last year. In particular, the salary of UK£250.0k, makes up a huge portion of the total compensation being paid to the CEO.
In comparison with other companies in the industry with market capitalizations under UK£147m, the reported median total CEO compensation was UK£240k. This suggests that Phillip Wale is paid more than the median for the industry.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | UK£250k | UK£169k | 63% |
| Other | UK£146k | UK£265k | 37% |
| Total Compensation | UK£396k | UK£433k | 100% |
Speaking on an industry level, nearly 49% of total compensation represents salary, while the remainder of 51% is other remuneration. According to our research, WH Ireland Group has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
However, offsetting this we also like to point out that according to a source representing the company, the CEO had paid back the initial stock award and second year bonus to support the firm.
A Look at WH Ireland Group plc's Growth Numbers
Over the last three years, WH Ireland Group plc has shrunk its earnings per share by 13% per year. Its revenue is up 13% over the last year.
Overall this is not a very positive result for shareholders. While the revenue growth is good to see, it is outweighed by the fact that EPS are down, over three years. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 WH Ireland Group plc Been A Good Investment?
Since shareholders would have lost about 64% over three years, some WH Ireland Group plc investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
As previously discussed, Phillip is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. Add to that declining EPS growth, and you have the perfect recipe for shareholder irritation. The CEO has taken some action to regain shareholders' goodwill. Considering such poor performance, typically shareholders might be concerned if the CEO's compensation were to grow. However, they will appreciate the CEO's recent actions.
CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 3 warning signs for WH Ireland Group (of which 1 is significant!) that you should know about in order to have a holistic understanding of the stock.
Important note: WH Ireland Group 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.
If you decide to trade WH Ireland Group, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers . Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account.Promoted
Valuation is complex, but we're here to simplify it.
Discover if WH Ireland Group might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
Access Free Analysis 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.
* Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
About AIM:WHI
WH Ireland Group
Provides wealth management services primarily in the United Kingdom.
Flawless balance sheet and slightly overvalued.
