This article will reflect on the compensation paid to Fredrik Widlund who has served as CEO of CLS Holdings plc (LON:CLI) since 2014. This analysis will also assess whether CLS Holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Check out our latest analysis for CLS Holdings
Comparing CLS Holdings plc's CEO Compensation With the industry
According to our data, CLS Holdings plc has a market capitalization of UK£884m, and paid its CEO total annual compensation worth UK£1.1m over the year to December 2019. That's a slightly lower by 3.5% over the previous year. While we always look at total compensation first, our analysis shows that the salary component is less, at UK£430k.
On examining similar-sized companies in the industry with market capitalizations between UK£295m and UK£1.2b, we discovered that the median CEO total compensation of that group was UK£949k. This suggests that CLS Holdings remunerates its CEO largely in line with the industry average. Moreover, Fredrik Widlund also holds UK£404k worth of CLS Holdings stock directly under their own name.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | UK£430k | UK£378k | 40% |
| Other | UK£648k | UK£739k | 60% |
| Total Compensation | UK£1.1m | UK£1.1m | 100% |
On an industry level, around 54% of total compensation represents salary and 46% is other remuneration. CLS Holdings pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at CLS Holdings plc's Growth Numbers
Over the last three years, CLS Holdings plc has shrunk its earnings per share by 19% per year. It achieved revenue growth of 3.3% over the last year.
The decline in EPS is a bit concerning. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has CLS Holdings plc Been A Good Investment?
With a three year total loss of 3.6% for the shareholders, CLS Holdings plc would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
As previously discussed, Fredrik is compensated close to the median for companies of its size, and which belong to the same industry. Meanwhile, EPS growth and shareholder returns have been in the red for the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 4 warning signs for CLS Holdings (of which 1 is a bit unpleasant!) that you should know about in order to have a holistic understanding of the stock.
Switching gears from CLS Holdings, 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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About LSE:CLI
CLS Holdings
Engages in the investment, development, and management of commercial properties in the United Kingdom, Germany, and France.
Good value average dividend payer.
