Our View On Creightons' (LON:CRL) CEO Pay

This article will reflect on the compensation paid to William McIlroy who has served as CEO of Creightons Plc (LON:CRL) since 2001. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Creightons.

View our latest analysis for Creightons

How Does Total Compensation For William McIlroy Compare With Other Companies In The Industry?

At the time of writing, our data shows that Creightons Plc has a market capitalization of UK£41m, and reported total annual CEO compensation of UK£224k for the year to March 2020. That's a slightly lower by 4.3% over the previous year. We think total compensation is more important but our data shows that the CEO salary is lower, at UK£25k.

For comparison, other companies in the industry with market capitalizations below UK£142m, reported a median total CEO compensation of UK£276k. This suggests that Creightons remunerates its CEO largely in line with the industry average. What's more, William McIlroy holds UK£1.1m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 36% of total compensation represents salary, while the remainder of 64% is other remuneration. Creightons sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Creightons Plc's Growth

Over the past three years, Creightons Plc has seen its earnings per share (EPS) grow by 43% per year. Its revenue is up 24% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. 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 Creightons Plc Been A Good Investment?

We think that the total shareholder return of 155%, over three years, would leave most Creightons Plc shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

As we noted earlier, Creightons pays its CEO in line with similar-sized companies belonging to the same industry. The company is growing EPS and total shareholder returns have been pleasing. Although the pay is close to the industry median, overall performance is excellent, so we don't think the CEO is paid too generously. Also, such solid returns might lead to shareholders warming to the idea of a bump in pay.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 2 warning signs for Creightons you should be aware of, and 1 of them is a bit concerning.

Switching gears from Creightons, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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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