Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
Andi Case has been the CEO of Clarkson PLC (LON:CKN) since 2008. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we’ll look at a snap shot of the business growth. 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.
How Does Andi Case’s Compensation Compare With Similar Sized Companies?
According to our data, Clarkson PLC has a market capitalization of UK£714m, and pays its CEO total annual compensation worth UK£2.8m. (This is based on the year to December 2018). That’s actually a decrease on the year before. While we always look at total compensation first, we note that the salary component is less, at UK£550k. We examined companies with market caps from UK£315m to UK£1.3b, and discovered that the median CEO total compensation of that group was UK£883k.
Thus we can conclude that Andi Case receives more in total compensation than the median of a group of companies in the same market, and of similar size to Clarkson PLC. However, this doesn’t necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at Clarkson has changed from year to year.
Is Clarkson PLC Growing?
On average over the last three years, Clarkson PLC has grown earnings per share (EPS) by 4.7% each year (using a line of best fit). Its revenue is up 4.2% over last year.
I’d prefer higher revenue growth, but the modest improvement in EPS is good. It’s clear the performance has been quite decent, but it it falls short of outstanding,based on this information. It could be important to check this free visual depiction of what analysts expect for the future.
Has Clarkson PLC Been A Good Investment?
With a total shareholder return of 11% over three years, Clarkson PLC shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
We compared the total CEO remuneration paid by Clarkson PLC, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
One might like to have seen stronger growth, and the shareholder returns have failed to inspire, over the last three years. In conclusion we think the company should definitely focus on improving the business before awarding any large pay rises. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Clarkson (free visualization of insider trades).
If you want to buy a stock that is better than Clarkson, this free list of high return, low debt companies is a great place to look.
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 firstname.lastname@example.org. 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.