Shareholders Would Not Be Objecting To Shoe Zone plc's (LON:SHOE) CEO Compensation And Here's Why

Key Insights

• Shoe Zone's Annual General Meeting to take place on 12th of March
• CEO Anthony Edward Smith's total compensation includes salary of UK£359.3k
• Total compensation is similar to the industry average
• Shoe Zone's EPS grew by 87% over the past three years while total shareholder return over the past three years was 345%

It would be hard to discount the role that CEO Anthony Edward Smith has played in delivering the impressive results at Shoe Zone plc (LON:SHOE) recently. Shareholders will have this at the front of their minds in the upcoming AGM on 12th of March. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. Here is our take on why we think CEO compensation is not extravagant.

Check out our latest analysis for Shoe Zone

Comparing Shoe Zone plc's CEO Compensation With The Industry

At the time of writing, our data shows that Shoe Zone plc has a market capitalization of UK£120m, and reported total annual CEO compensation of UK£560k for the year to September 2023. This means that the compensation hasn't changed much from last year. Notably, the salary which is UK£359.3k, represents most of the total compensation being paid.

On comparing similar companies from the British Specialty Retail industry with market caps ranging from UK£79m to UK£315m, we found that the median CEO total compensation was UK£665k. So it looks like Shoe Zone compensates Anthony Edward Smith in line with the median for the industry. What's more, Anthony Edward Smith holds UK£39m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	UK£359k	UK£350k	64%
Other	UK£201k	UK£199k	36%
Total Compensation	UK£560k	UK£549k	100%

Talking in terms of the industry, salary represented approximately 49% of total compensation out of all the companies we analyzed, while other remuneration made up 51% of the pie. It's interesting to note that Shoe Zone pays out a greater portion of remuneration through salary, compared to the industry. 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.

Shoe Zone plc's Growth

Over the past three years, Shoe Zone plc has seen its earnings per share (EPS) grow by 87% per year. In the last year, its revenue is up 6.1%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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 Shoe Zone plc Been A Good Investment?

Most shareholders would probably be pleased with Shoe Zone plc for providing a total return of 345% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 2 warning signs (and 1 which makes us a bit uncomfortable) in Shoe Zone we think you should know about.

Switching gears from Shoe Zone, 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. 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.