Should You Worry About NWF Group plc’s (LON:NWF) CEO Pay Cheque?

The CEO of NWF Group plc (LON:NWF) is Richard Whiting. First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for NWF Group

How Does Richard Whiting’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that NWF Group plc has a market cap of UK£81m, and is paying total annual CEO compensation of UK£783k. (This is based on the year to May 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at UK£283k. We examined a group of similar sized companies, with market capitalizations of below UK£165m. The median CEO total compensation in that group is UK£251k.

As you can see, Richard Whiting is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean NWF Group plc is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.

The graphic below shows how CEO compensation at NWF Group has changed from year to year.

AIM:NWF CEO Compensation, August 12th 2019
AIM:NWF CEO Compensation, August 12th 2019

Is NWF Group plc Growing?

NWF Group plc has increased its earnings per share (EPS) by an average of 19% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 9.9%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s nice to see a little revenue growth, as this is consistent with healthy business conditions.

Has NWF Group plc Been A Good Investment?

With a total shareholder return of 7.2% over three years, NWF Group plc has done okay by shareholders. But they probably wouldn’t be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary…

We examined the amount NWF Group 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.

However we must not forget that the EPS growth has been very strong over three years. Looking at the same time period, we think that the shareholder returns are respectable. So, considering the EPS growth we do not wish to criticize the level of CEO compensation, though we’d recommend further research on management. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling NWF Group (free visualization of insider trades).

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.