Does C4X Discovery Holdings plc's (LON:C4XD) CEO Pay Reflect Performance?

In 2016 Clive Dix was appointed CEO of C4X Discovery Holdings plc (LON:C4XD). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for C4X Discovery Holdings

How Does Clive Dix's Compensation Compare With Similar Sized Companies?

Our data indicates that C4X Discovery Holdings plc is worth UK£13m, and total annual CEO compensation was reported as UK£159k for the year to July 2019. Notably, the salary of UK£159k is the vast majority of the CEO compensation. We looked at a group of companies with market capitalizations under UK£155m, and the median CEO total compensation was UK£250k.

Most shareholders would consider it a positive that Clive Dix takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it's important we delve into the performance of the actual business.

You can see, below, how CEO compensation at C4X Discovery Holdings has changed over time.

Is C4X Discovery Holdings plc Growing?

C4X Discovery Holdings plc has increased its earnings per share (EPS) by an average of 22% a year, over the last three years (using a line of best fit). In the last year, its revenue changed by just 0.9%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. Revenue growth is a real positive for growth, but ultimately profits are more important. Shareholders might be interested in this free visualization of analyst forecasts.

Has C4X Discovery Holdings plc Been A Good Investment?

Since shareholders would have lost about 87% over three years, some C4X Discovery Holdings plc shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

C4X Discovery Holdings plc is currently paying its CEO below what is normal for companies of its size.

Considering the underlying business is growing earnings, this would suggest the pay is modest. Few would deny that the total shareholder return over the last three years could have been a lot better. So while we would not say that Clive Dix is generously paid, it would be good to see an improvement in business performance before too an increase in pay. When I see fairly low remuneration, combined with earnings per share growth, but without big share price gains, it makes me want to research the potential for future gains. So you may want to check if insiders are buying C4X Discovery Holdings shares with their own money (free access).

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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

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