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What Did Halfords Group's (LON:HFD) CEO Take Home Last Year?

Simply Wall St
·3 mins read

This article will reflect on the compensation paid to Graham Stapleton who has served as CEO of Halfords Group plc (LON:HFD) since 2018. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Halfords Group.

Check out our latest analysis for Halfords Group

How Does Total Compensation For Graham Stapleton Compare With Other Companies In The Industry?

At the time of writing, our data shows that Halfords Group plc has a market capitalization of UK£373m, and reported total annual CEO compensation of UK£678k for the year to March 2020. That's just a smallish increase of 5.6% on last year. We note that the salary portion, which stands at UK£550.6k constitutes the majority of total compensation received by the CEO.

On comparing similar companies from the same industry with market caps ranging from UK£156m to UK£626m, we found that the median CEO total compensation was UK£626k. So it looks like Halfords Group compensates Graham Stapleton in line with the median for the industry. Furthermore, Graham Stapleton directly owns UK£239k worth of shares in the company.

Component

2020

2019

Proportion (2020)

Salary

UK£551k

UK£540k

81%

Other

UK£127k

UK£102k

19%

Total Compensation

UK£678k

UK£642k

100%

On an industry level, roughly 68% of total compensation represents salary and 32% is other remuneration. It's interesting to note that Halfords Group pays out a greater portion of remuneration through salary, compared to the 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.

ceo-compensation
ceo-compensation

A Look at Halfords Group plc's Growth Numbers

Over the last three years, Halfords Group plc has shrunk its earnings per share by 32% per year. In the last year, its revenue is up 1.5%.

The decline in EPS is a bit concerning. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Halfords Group plc Been A Good Investment?

Since shareholders would have lost about 30% over three years, some Halfords Group plc investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As we touched on above, Halfords Group plc is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. On the other hand, EPS growth and total shareholder return have been negative for the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 4 warning signs for Halfords Group that investors should think about before committing capital to this stock.

Switching gears from Halfords Group, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.