Shareholders May Not Be So Generous With DFS Furniture plc's (LON:DFS) CEO Compensation And Here's Why

Key Insights

• DFS Furniture will host its Annual General Meeting on 10th of November
• Total pay for CEO Tim Stacey includes UK£453.0k salary
• Total compensation is similar to the industry average
• Over the past three years, DFS Furniture's EPS grew by 52% and over the past three years, the total loss to shareholders 41%

Shareholders of DFS Furniture plc (LON:DFS) will have been dismayed by the negative share price return over the last three years. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 10th of November. They could also influence management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

See our latest analysis for DFS Furniture

How Does Total Compensation For Tim Stacey Compare With Other Companies In The Industry?

At the time of writing, our data shows that DFS Furniture plc has a market capitalization of UK£237m, and reported total annual CEO compensation of UK£665k for the year to June 2023. That's a notable increase of 34% on last year. Notably, the salary which is UK£453.0k, represents most of the total compensation being paid.

In comparison with other companies in the British Specialty Retail industry with market capitalizations ranging from UK£81m to UK£323m, the reported median CEO total compensation was UK£607k. So it looks like DFS Furniture compensates Tim Stacey in line with the median for the industry. Moreover, Tim Stacey also holds UK£705k worth of DFS Furniture stock directly under their own name.

Component	2023	2022	Proportion (2023)
Salary	UK£453k	UK£443k	68%
Other	UK£212k	UK£53k	32%
Total Compensation	UK£665k	UK£496k	100%

On an industry level, around 56% of total compensation represents salary and 44% is other remuneration. DFS Furniture is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

DFS Furniture plc's Growth

DFS Furniture plc has seen its earnings per share (EPS) increase by 52% a year over the past three years. Its revenue is down 5.2% over the previous year.

This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has DFS Furniture plc Been A Good Investment?

Few DFS Furniture plc shareholders would feel satisfied with the return of -41% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 3 warning signs for DFS Furniture (1 can't be ignored!) that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.