Shareholders May Be Wary Of Increasing Hardide plc's (LON:HDD) CEO Compensation Package

Shareholders will probably not be too impressed with the underwhelming results at Hardide plc (LON:HDD) recently. At the upcoming AGM on 11 March 2022, shareholders can hear from the board including their plans for turning around performance. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Check out our latest analysis for Hardide

How Does Total Compensation For Philip Kirkham Compare With Other Companies In The Industry?

Our data indicates that Hardide plc has a market capitalization of UK£17m, and total annual CEO compensation was reported as UK£193k for the year to September 2021. This means that the compensation hasn't changed much from last year. It is worth noting that the CEO compensation consists entirely of the salary, worth UK£193k.

In comparison with other companies in the industry with market capitalizations under UK£151m, the reported median total CEO compensation was UK£230k. So it looks like Hardide compensates Philip Kirkham in line with the median for the industry.

Component	2021	2020	Proportion (2021)
Salary	UK£193k	UK£191k	100%
Other	-	-	-
Total Compensation	UK£193k	UK£191k	100%

On an industry level, roughly 68% of total compensation represents salary and 32% is other remuneration. On a company level, Hardide prefers to reward its CEO through a salary, opting not to pay Philip Kirkham through non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Hardide plc's Growth

Over the last three years, Hardide plc has shrunk its earnings per share by 32% per year. Its revenue is down 24% over the previous year.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Hardide plc Been A Good Investment?

Few Hardide plc shareholders would feel satisfied with the return of -40% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Hardide pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 5 warning signs for Hardide (of which 1 is concerning!) that you should know about in order to have a holistic understanding of the stock.

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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.