This article will reflect on the compensation paid to Keith Neilson who has served as CEO of Craneware plc (LON:CRW) since 1999. This analysis will also assess whether Craneware pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
View our latest analysis for Craneware
Comparing Craneware plc's CEO Compensation With the industry
According to our data, Craneware plc has a market capitalization of UK£604m, and paid its CEO total annual compensation worth US$390k over the year to June 2020. That's a notable decrease of 12% on last year. In particular, the salary of US$368.4k, makes up a huge portion of the total compensation being paid to the CEO.
On examining similar-sized companies in the industry with market capitalizations between UK£300m and UK£1.2b, we discovered that the median CEO total compensation of that group was US$1.1m. That is to say, Keith Neilson is paid under the industry median. What's more, Keith Neilson holds UK£79m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | US$368k | US$418k | 94% |
| Other | US$22k | US$25k | 6% |
| Total Compensation | US$390k | US$443k | 100% |
On an industry level, around 85% of total compensation represents salary and 15% is other remuneration. It's interesting to note that Craneware pays out a greater portion of remuneration through salary, compared to the industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at Craneware plc's Growth Numbers
Craneware plc's earnings per share (EPS) grew 7.8% per year over the last three years. Revenue was pretty flat on last year.
We would argue that the improvement in revenue is good, but isn't particularly impressive, but the modest improvement in EPS is good. Considering these factors we'd say performance has been pretty decent, though not amazing. 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 Craneware plc Been A Good Investment?
Most shareholders would probably be pleased with Craneware plc for providing a total return of 64% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
As we noted earlier, Craneware pays its CEO lower than the norm for similar-sized companies belonging to the same industry. However, shareholder returns are rock solid over the past three years, and that’s undoubtedly a good sign. So, considering these tasty returns, CEO compensation seems quite appropriate.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 2 warning signs (and 1 which is significant) in Craneware we think you should know about.
Important note: Craneware 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 AIM:CRW
Craneware
Develops, licenses, and supports computer software for the healthcare industry in the United States.
Reasonable growth potential with proven track record.
