This article will reflect on the compensation paid to Andrew Denton who has served as CEO of Alfa Financial Software Holdings PLC (LON:ALFA) since 2016. This analysis will also assess whether Alfa Financial Software Holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing Alfa Financial Software Holdings PLC's CEO Compensation With the industry
According to our data, Alfa Financial Software Holdings PLC has a market capitalization of UK£387m, and paid its CEO total annual compensation worth UK£338k over the year to December 2019. This means that the compensation hasn't changed much from last year. Notably, the salary which is UK£322.0k, represents most of the total compensation being paid.
In comparison with other companies in the industry with market capitalizations ranging from UK£150m to UK£602m, the reported median CEO total compensation was UK£499k. This suggests that Andrew Denton is paid below the industry median.
On an industry level, roughly 66% of total compensation represents salary and 34% is other remuneration. Alfa Financial Software Holdings is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at Alfa Financial Software Holdings PLC's Growth Numbers
Over the past three years, Alfa Financial Software Holdings PLC has seen its earnings per share (EPS) grow by 8.4% per year. Its revenue is up 4.1% over the last year.
We're not particularly impressed by the revenue growth, but the modest improvement in EPS is good. So there are some positives here, but not enough to earn high praise. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Alfa Financial Software Holdings PLC Been A Good Investment?
Since shareholders would have lost about 70% over three years, some Alfa Financial Software Holdings PLC investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.
Andrew receives almost all of their compensation through a salary. As we touched on above, Alfa Financial Software Holdings PLC is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But then, EPS growth is lacking and so are the returns to shareholders. So while we don't think, Andrew is paid too much, shareholders may hope that business performance translates to investment returns before pay rises are given out.
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 2 warning signs (and 1 which doesn't sit too well with us) in Alfa Financial Software Holdings we think you should know about.
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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