We Discuss Whether Beeks Trading Corporation Ltd.'s (LON:BKS) CEO Is Due For A Pay Rise

Shareholders will be pleased by the impressive results for Beeks Trading Corporation Ltd. (LON:BKS) recently and CEO Gordon McArthur has played a key role. This would be kept in mind at the upcoming AGM on 23 April 2021 which will be a chance for them to hear the board review the financial results, discuss future company strategy and vote on resolutions such as executive remuneration and other matters. Here we will show why we think CEO compensation is appropriate and discuss the case for a pay rise.

See our latest analysis for Beeks Trading

Comparing Beeks Trading Corporation Ltd.'s CEO Compensation With the industry

At the time of writing, our data shows that Beeks Trading Corporation Ltd. has a market capitalization of UK£65m, and reported total annual CEO compensation of UK£62k for the year to June 2020. That's a notable decrease of 22% on last year. In particular, the salary of UK£60.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below UK£145m, reported a median total CEO compensation of UK£251k. That is to say, Gordon McArthur is paid under the industry median. Moreover, Gordon McArthur also holds UK£35m worth of Beeks Trading stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2020	2019	Proportion (2020)
Salary	UK£60k	UK£67k	97%
Other	UK£2.0k	UK£12k	3%
Total Compensation	UK£62k	UK£79k	100%

On an industry level, around 67% of total compensation represents salary and 33% is other remuneration. Beeks Trading pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Beeks Trading Corporation Ltd.'s Growth

Beeks Trading Corporation Ltd.'s earnings per share (EPS) grew 86% per year over the last three years. Its revenue is up 29% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Beeks Trading Corporation Ltd. Been A Good Investment?

We think that the total shareholder return of 115%, over three years, would leave most Beeks Trading Corporation Ltd. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Gordon receives almost all of their compensation through a salary. Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

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 Beeks Trading (of which 1 doesn't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.

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. 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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