There Could Be A Chance Caledonian Trust PLC's (LON:CNN) CEO Will Have Their Compensation Increased
Key Insights
Caledonian Trust to hold its Annual General Meeting on 23rd of February
CEO Ian Lowe's total compensation includes salary of UK£45.0k
The overall pay is 87% below the industry average
Caledonian Trust's total shareholder return over the past three years was 8.3% while its EPS grew by 96% over the past three years
Shareholders will probably not be disappointed by the robust results at Caledonian Trust PLC (LON:CNN) recently and they will be keeping this in mind as they go into the AGM on 23rd of February. The focus will probably be on the future strategic initiatives that the board and management will put in place to improve the business rather than executive remuneration when they cast their votes on company resolutions. In our analysis below, we discuss why we think the CEO compensation looks acceptable and the case for a raise.
Check out our latest analysis for Caledonian Trust
How Does Total Compensation For Ian Lowe Compare With Other Companies In The Industry?
Our data indicates that Caledonian Trust PLC has a market capitalization of UK£15m, and total annual CEO compensation was reported as UK£51k for the year to June 2023. That's a notable increase of 55% on last year. In particular, the salary of UK£45.0k, makes up a huge portion of the total compensation being paid to the CEO.
In comparison with other companies in the British Real Estate industry with market capitalizations under UK£159m, the reported median total CEO compensation was UK£389k. That is to say, Ian Lowe is paid under the industry median. What's more, Ian Lowe holds UK£7.1m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2023 | 2022 | Proportion (2023) |
Salary | UK£45k | UK£28k | 88% |
Other | UK£6.0k | UK£5.0k | 12% |
Total Compensation | UK£51k | UK£33k | 100% |
On an industry level, roughly 66% of total compensation represents salary and 34% is other remuneration. It's interesting to note that Caledonian Trust pays out a greater portion of remuneration through salary, compared to the industry. 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 Caledonian Trust PLC's Growth Numbers
Caledonian Trust PLC has seen its earnings per share (EPS) increase by 96% a year over the past three years. In the last year, its revenue is up 893%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Caledonian Trust PLC Been A Good Investment?
With a total shareholder return of 8.3% over three years, Caledonian Trust PLC has done okay by shareholders, but there's always room for improvement. As a result, investors in the company might be reluctant about agreeing to increase CEO pay in the future, before seeing an improvement on their returns.
In Summary...
The company's overall performance, while not bad, could be better. If it continues on the same road, shareholders might feel even more confident about their investment, and have little to no objections concerning CEO pay. Rather, investors would more likely want to engage on discussions related to key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 4 warning signs (and 1 which is potentially serious) in Caledonian Trust we think you should know about.
Important note: Caledonian Trust 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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
