Charlie Holland became the CEO of Gusbourne PLC (LON:GUS) in 2016, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Gusbourne pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing Gusbourne PLC's CEO Compensation With the industry
According to our data, Gusbourne PLC has a market capitalization of UK£27m, and paid its CEO total annual compensation worth UK£101k over the year to December 2019. Notably, that's an increase of 22% over the year before. Notably, the salary which is UK£96.0k, represents most of the total compensation being paid.
For comparison, other companies in the industry with market capitalizations below UK£148m, reported a median total CEO compensation of UK£257k. In other words, Gusbourne pays its CEO lower than the industry median.
On an industry level, roughly 61% of total compensation represents salary and 39% is other remuneration. Investors will find it interesting that Gusbourne pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Gusbourne PLC's Growth
Earnings per share at Gusbourne PLC are much the same as they were three years ago, albeit with slightly higher. In the last year, its revenue is up 23%.
We would argue that the modest growth in revenue is a notable positive. And the improvement in EPSis modest but respectable. So while we'd stop just short of calling this a top performer, but we think it is well worth watching. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Gusbourne PLC Been A Good Investment?
With a total shareholder return of 24% over three years, Gusbourne PLC shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
Gusbourne pays its CEO a majority of compensation through a salary. As previously discussed, Charlie is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. At the same time, EPS growth and shareholder returns, though solid, have not been very strong over the last three years. So, even though we don't think CEO compensation is too generous, shareholders will likely want to see more growth before they agree that Charlie deserves a raise.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 4 warning signs (and 2 which shouldn't be ignored) in Gusbourne we think you should know about.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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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