The CEO of Capital Limited (LON:CAPD) is Jamie Boyton, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Capital pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
View our latest analysis for Capital
Comparing Capital Limited's CEO Compensation With the industry
Our data indicates that Capital Limited has a market capitalization of UK£82m, and total annual CEO compensation was reported as US$570k for the year to December 2019. That's a notable decrease of 24% on last year. Notably, the salary which is US$400.0k, represents most of the total compensation being paid.
On comparing similar-sized companies in the industry with market capitalizations below UK£148m, we found that the median total CEO compensation was US$479k. This suggests that Capital remunerates its CEO largely in line with the industry average. What's more, Jamie Boyton holds UK£13m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | US$400k | US$400k | 70% |
| Other | US$170k | US$350k | 30% |
| Total Compensation | US$570k | US$750k | 100% |
On an industry level, around 70% of total compensation represents salary and 30% is other remuneration. Although there is a difference in how total compensation is set, Capital more or less reflects the market in terms of setting the salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at Capital Limited's Growth Numbers
Over the past three years, Capital Limited has seen its earnings per share (EPS) grow by 62% per year. Its revenue is up 7.5% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Capital Limited Been A Good Investment?
We think that the total shareholder return of 75%, over three years, would leave most Capital Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
To Conclude...
As previously discussed, Jamie is compensated close to the median for companies of its size, and which belong to the same industry. Investors would surely be happy to see that returns have been great, and that EPS is up. Although the pay is close to the industry median, overall performance is excellent, so we don't think the CEO is paid too generously. Stockholders might even be okay with a bump in pay, seeing as how investor returns have been so strong.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 4 warning signs (and 2 which make us uncomfortable) in Capital we think you should know about.
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.
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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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About LSE:CAPD
Capital
Provides various drilling solutions to customers in the minerals industry.
Undervalued with excellent balance sheet and pays a dividend.
