Is FairFX Group Plc's (LON:EQLS) CEO Paid Enough Relative To Peers?

In 2012 Ian Alexander Strafford-Taylor was appointed CEO of FairFX Group Plc (LON:EQLS). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for FairFX Group

How Does Ian Alexander Strafford-Taylor's Compensation Compare With Similar Sized Companies?

According to our data, FairFX Group Plc has a market capitalization of UK£192m, and pays its CEO total annual compensation worth UK£263k. (This is based on the year to December 2018). Notably, the salary of UK£263k is the vast majority of the CEO compensation. We looked at a group of companies with market capitalizations from UK£82m to UK£327m, and the median CEO total compensation was UK£504k.

A first glance this seems like a real positive for shareholders, since Ian Alexander Strafford-Taylor is paid less than the average total compensation paid by similar sized companies. Though positive, it's important we delve into the performance of the actual business.

The graphic below shows how CEO compensation at FairFX Group has changed from year to year.

Is FairFX Group Plc Growing?

FairFX Group Plc has increased its earnings per share (EPS) by an average of 123% a year, over the last three years (using a line of best fit). It achieved revenue growth of 69% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see.

Has FairFX Group Plc Been A Good Investment?

Boasting a total shareholder return of 260% over three years, FairFX Group Plc has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

FairFX Group Plc is currently paying its CEO below what is normal for companies of its size. Considering the underlying business is growing earnings, this would suggest the pay is modest. The pleasing shareholder returns are the cherry on top; you might even consider that Ian Alexander Strafford-Taylor deserves a raise!

Most shareholders like to see a modestly paid CEO combined with strong performance by the company. But it is even better if company insiders are also buying shares with their own money. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling FairFX Group (free visualization of insider trades).

Important note: FairFX Group may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.