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.
How Does Total Compensation For Charlie Holland Compare With Other Companies In The Industry?
At the time of writing, our data shows that Gusbourne PLC has a market capitalization of UK£27m, and reported total annual CEO compensation of UK£101k for the year to December 2019. Notably, that's an increase of 22% over the year before. We note that the salary portion, which stands at UK£96.0k constitutes the majority of total compensation received by the CEO.
On comparing similar-sized companies in the industry with market capitalizations below UK£155m, we found that the median total CEO compensation was UK£291k. This suggests that Charlie Holland is paid below the industry median.
On an industry level, around 46% of total compensation represents salary and 54% is other remuneration. Gusbourne pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
Gusbourne PLC's Growth
Gusbourne PLC's earnings per share (EPS) grew 11% per year over the last three years. In the last year, its revenue is up 31%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. 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 Gusbourne PLC Been A Good Investment?
Gusbourne PLC has served shareholders reasonably well, with a total return of 18% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
Charlie receives almost all of their compensation through a salary. As we touched on above, Gusbourne PLC is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But over the last three years, EPS growth has been growing rapidly, which is a great sign for the company. However, shareholder returns have failed to show the same level of growth. Shareholder returns could be better but we're pleased with the positive EPS growth. So considering these factors, we think Charlie is modestly compensated.
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 identified 4 warning signs for Gusbourne (2 can't be ignored!) that you should be aware of before investing here.
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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