Our Take On Circle Property's (LON:CRC) CEO Salary

John Arnold has been the CEO of Circle Property Plc (LON:CRC) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Circle Property

Comparing Circle Property Plc's CEO Compensation With the industry

According to our data, Circle Property Plc has a market capitalization of UK£50m, and paid its CEO total annual compensation worth UK£672k over the year to March 2020. We note that's an increase of 9.8% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at UK£215k.

For comparison, other companies in the industry with market capitalizations below UK£146m, reported a median total CEO compensation of UK£272k. Hence, we can conclude that John Arnold is remunerated higher than the industry median. Furthermore, John Arnold directly owns UK£1.8m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 51% of total compensation represents salary, while the remainder of 49% is other remuneration. In Circle Property's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Circle Property Plc's Growth Numbers

Circle Property Plc has reduced its earnings per share by 46% a year over the last three years. In the last year, its revenue is up 34%.

Investors would be a bit wary of companies that have lower EPS But in contrast the revenue growth is strong, suggesting future potential for EPS growth. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Circle Property Plc Been A Good Investment?

Circle Property Plc has generated a total shareholder return of 16% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

As we touched on above, Circle Property 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. On the other hand, revenues will undoubtedly inspire confidence since they've been growing at a healthy pace recently. Shareholder returns, while also growing, haven't impressed us that much during the same stretch. EPS growth, on the other hand, is negative, a concerning trend. All things considered, we don't think CEO compensation is unfair, though shareholders will likely want to see an overall improvement in performance before any potential raise.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 6 warning signs for Circle Property (2 don't sit too well with us!) that you should be aware of before investing here.

Important note: Circle Property 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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