What Does CAP-XX's (LON:CPX) CEO Pay Reveal?

The CEO of CAP-XX Limited (LON:CPX) is Anthony Kongats, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether CAP-XX pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for CAP-XX

Comparing CAP-XX Limited's CEO Compensation With the industry

At the time of writing, our data shows that CAP-XX Limited has a market capitalization of UK£20m, and reported total annual CEO compensation of AU$537k for the year to June 2020. We note that's a small decrease of 7.8% on last year. In particular, the salary of AU$322.1k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the industry with market capitalizations below UK£150m, we found that the median total CEO compensation was AU$429k. So it looks like CAP-XX compensates Anthony Kongats in line with the median for the industry. What's more, Anthony Kongats holds UK£450k worth of shares in the company in their own name.

Speaking on an industry level, nearly 74% of total compensation represents salary, while the remainder of 26% is other remuneration. CAP-XX pays a modest slice of remuneration through salary, as compared to the broader 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 CAP-XX Limited's Growth Numbers

Over the last three years, CAP-XX Limited has shrunk its earnings per share by 23% per year. Its revenue is up 12% over the last year.

The decline in EPS is a bit concerning. While the revenue growth is good to see, it is outweighed by the fact that EPS are down, over three years. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 CAP-XX Limited Been A Good Investment?

With a three year total loss of 65% for the shareholders, CAP-XX Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we noted earlier, CAP-XX pays its CEO in line with similar-sized companies belonging to the same industry. Meanwhile, EPS growth and shareholder returns have been in the red for the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 6 warning signs for CAP-XX you should be aware of, and 2 of them don't sit too well with us.

Important note: CAP-XX is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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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