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This article will reflect on the compensation paid to Roberto Fiorentino who has served as CEO of Croma Security Solutions Group plc (LON:CSSG) since 2012. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Croma Security Solutions Group.
Comparing Croma Security Solutions Group plc's CEO Compensation With the industry
According to our data, Croma Security Solutions Group plc has a market capitalization of UK£9.8m, and paid its CEO total annual compensation worth UK£240k over the year to June 2020. This means that the compensation hasn't changed much from last year. In particular, the salary of UK£236.0k, 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£152m, we found that the median total CEO compensation was UK£236k. So it looks like Croma Security Solutions Group compensates Roberto Fiorentino in line with the median for the industry. Moreover, Roberto Fiorentino also holds UK£2.6m worth of Croma Security Solutions Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, around 74% of total compensation represents salary and 26% is other remuneration. Investors will find it interesting that Croma Security Solutions Group pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. 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 Croma Security Solutions Group plc's Growth Numbers
Croma Security Solutions Group plc has reduced its earnings per share by 11% a year over the last three years. It saw its revenue drop 6.6% over the last year.
The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Croma Security Solutions Group plc Been A Good Investment?
Croma Security Solutions Group plc has served shareholders reasonably well, with a total return of 23% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
Croma Security Solutions Group pays its CEO a majority of compensation through a salary. As previously discussed, Roberto is compensated close to the median for companies of its size, and which belong to the same industry. According to our analysis, Croma Security Solutions Group is suffering from uninspiring EPS growth, and even though shareholder returns are stable, they are hardly impressive. These figures do not go well against CEO compensation, which is more or less equal to the industry median. Considering all of this, we can't say the CEO is underpaid, and moving forward shareholders will likely want to see higher growth to justify any raise.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 2 warning signs for Croma Security Solutions Group that investors should look into moving forward.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
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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