Carol Gysin has been the CEO of R.E.A. Holdings plc (LON:RE.) since 2017, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether R.E.A. Holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
View our latest analysis for R.E.A. Holdings
Comparing R.E.A. Holdings plc's CEO Compensation With the industry
According to our data, R.E.A. Holdings plc has a market capitalization of UK£27m, and paid its CEO total annual compensation worth UK£582k over the year to December 2019. That's a slight decrease of 3.6% on the prior year. Notably, the salary which is US$452.0k, represents most of the total compensation being paid.
On comparing similar-sized companies in the industry with market capitalizations below UK£151m, we found that the median total CEO compensation was UK£281k. This suggests that Carol Gysin is paid more than the median for the industry.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | UK£452k | UK£414k | 78% |
| Other | UK£130k | UK£189k | 22% |
| Total Compensation | UK£582k | UK£603k | 100% |
On an industry level, around 71% of total compensation represents salary and 29% is other remuneration. Our data reveals that R.E.A. Holdings allocates salary more or less in line with the wider market. 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.
A Look at R.E.A. Holdings plc's Growth Numbers
R.E.A. Holdings plc has seen its earnings per share (EPS) increase by 17% a year over the past three years. Its revenue is up 15% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has R.E.A. Holdings plc Been A Good Investment?
Since shareholders would have lost about 80% over three years, some R.E.A. Holdings plc investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
As we noted earlier, R.E.A. Holdings pays its CEO higher than the norm for similar-sized companies belonging to the same industry. However, we must not forget that the EPS growth has been very strong, but shareholder returns — over the same period — have been disappointing. Considering overall performance, we can't say Carol is underpaid, in fact compensation is definitely on the higher side.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for R.E.A. Holdings that you should be aware of before investing.
Important note: R.E.A. Holdings is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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:RE.
R.E.A. Holdings
Engages in the cultivation of oil palms in the province of East Kalimantan in Indonesia.
Undervalued with mediocre balance sheet.
