Charlie Holland became the CEO of Gusbourne PLC (LON:GUS) in 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Charlie Holland's Compensation Compare With Similar Sized Companies?
Our data indicates that Gusbourne PLC is worth UK£29m, and total annual CEO compensation is UK£83k. (This number is for the twelve months until December 2018). Notably, the salary of UK£79k is the vast majority of the CEO compensation. 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£253k.
A first glance this seems like a real positive for shareholders, since Charlie Holland is paid less than the average total compensation paid by similar sized companies. Though positive, it's important we delve into the performance of the actual business.
The graphic below shows how CEO compensation at Gusbourne has changed from year to year.
Is Gusbourne PLC Growing?
Gusbourne PLC has increased its earnings per share (EPS) by an average of 13% a year, over the last three years (using a line of best fit). It achieved revenue growth of 26% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business.
Has Gusbourne PLC Been A Good Investment?
With a total shareholder return of 33% over three years, Gusbourne PLC shareholders would, in general, be reasonably content. 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.
It appears that Gusbourne PLC remunerates its CEO below most similar sized companies. Since the business is growing, many would argue this suggests the pay is modest. The total shareholder return might not be amazing, but that doesn't mean that Charlie Holland is paid too much.
Few would complain about reasonable CEO remuneration when the business is growing earnings per share. It would be an additional positive if insiders are buying shares. Whatever your view on compensation, you might want to check if insiders are buying or selling Gusbourne shares (free trial).
If you want to buy a stock that is better than Gusbourne, this free list of high return, low debt companies is a great place to look.
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