What Does James Cropper's (LON:CRPR) CEO Pay Reveal?

Phil Wild has been the CEO of James Cropper PLC ( LON:CRPR ) since 2012, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether James Cropper pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for James Cropper

How Does Total Compensation For Phil Wild Compare With Other Companies In The Industry?

Our data indicates that James Cropper PLC has a market capitalization of UK£98m, and total annual CEO compensation was reported as UK£299k for the year to March 2020. We note that's an increase of 21% above last year. Notably, the salary which is UK£204.0k, represents most of the total compensation being paid.

On comparing similar-sized companies in the industry with market capitalizations below UK£146m, we found that the median total CEO compensation was UK£170k. This suggests that Phil Wild is paid more than the median for the industry. Furthermore, Phil Wild directly owns UK£265k worth of shares in the company.

Component	2020	2019	Proportion (2020)
Salary	UK£204k	UK£198k	68%
Other	UK£95k	UK£49k	32%
Total Compensation	UK£299k	UK£247k	100%

On an industry level, around 52% of total compensation represents salary and 48% is other remuneration. James Cropper pays out 68% of remuneration in the form of a salary, significantly higher than the industry average. 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.

James Cropper PLC's Growth

Over the last three years, James Cropper PLC has shrunk its earnings per share by 15% per year. In the last year, its revenue is down 17% (on a tralining-12-month basis to the period ending September 2020).

Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. We should add that the company's revenue did increase by 3% during FY2020, which is the period that lines up with the remuneration window we have examined above. So the company's revenue performance during that time was much stronger. 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 James Cropper PLC Been A Good Investment?

Since shareholders would have lost about 37% over three years, some James Cropper PLC investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As we touched on above, James Cropper PLC is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Unfortunately, share price gains over the last three years have failed to materialize. Add to that declining EPS growth, and you have a recipe for shareholder irritation. The company's shareholders might have some questions about the CEO's remuneration in future periods, given the disappointing performance.

Shareholders may want to check for free if James Cropper insiders are buying or selling shares.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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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