This article will reflect on the compensation paid to Simon G. Caffyn who has served as CEO of Caffyns plc (LON:CFYN) since 1998. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Check out our latest analysis for Caffyns
How Does Total Compensation For Simon G. Caffyn Compare With Other Companies In The Industry?
Our data indicates that Caffyns plc has a market capitalization of UK£10m, and total annual CEO compensation was reported as UK£319k for the year to March 2020. We note that's a decrease of 12% compared to last year. In particular, the salary of UK£290.0k, makes up a huge portion of the total compensation being paid to the CEO.
In comparison with other companies in the industry with market capitalizations under UK£147m, the reported median total CEO compensation was UK£384k. From this we gather that Simon G. Caffyn is paid around the median for CEOs in the industry. What's more, Simon G. Caffyn holds UK£296k worth of shares in the company in their own name.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | UK£290k | UK£284k | 91% |
| Other | UK£29k | UK£80k | 9% |
| Total Compensation | UK£319k | UK£364k | 100% |
On an industry level, roughly 79% of total compensation represents salary and 21% is other remuneration. According to our research, Caffyns has allocated a higher percentage of pay to salary in comparison to the wider 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.
A Look at Caffyns plc's Growth Numbers
Over the past three years, Caffyns plc has seen its earnings per share (EPS) grow by 1.8% per year. In the last year, its revenue is down 8.9%.
We would prefer it if there was revenue growth, but it is good to see a modest EPS growth at least. It's hard to reach a conclusion about business performance right now. This may be one to watch. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Caffyns plc Been A Good Investment?
Caffyns plc has not done too badly by shareholders, with a total return of 3.5%, over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
In Summary...
As previously discussed, Simon G. is compensated close to the median for companies of its size, and which belong to the same industry. But the company has failed to produce substantial growth in either EPS or total shareholder return. So, although the CEO compensation seems reasonable, shareholders might want to see some further progress before they agree that Simon G. should get a raise.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 4 warning signs (and 2 which are potentially serious) in Caffyns we think you should know about.
Switching gears from Caffyns, 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:CFYN
Caffyns
Operates as a motor vehicle retailer in the south-east of the United Kingdom.
Mediocre balance sheet low.
