Clem Chambers is the CEO of ADVFN plc (LON:AFN). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Clem Chambers's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that ADVFN plc has a market cap of UK£4.6m, and reported total annual CEO compensation of UK£395k for the year to June 2019. We think total compensation is more important but we note that the CEO salary is lower, at UK£342k. We looked at a group of companies with market capitalizations under UK£152m, and the median CEO total compensation was UK£250k.
As you can see, Clem Chambers is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean ADVFN plc is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
The graphic below shows how CEO compensation at ADVFN has changed from year to year.
Is ADVFN plc Growing?
ADVFN plc has increased its earnings per share (EPS) by an average of 23% a year, over the last three years (using a line of best fit). Its revenue is down 5.3% over last year.
This demonstrates that the company has been improving recently. A good result. While it would be good to see revenue growth, profits matter more in the end. Although we don't have analyst forecasts you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has ADVFN plc Been A Good Investment?
Given the total loss of 35% over three years, many shareholders in ADVFN plc are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
We compared total CEO remuneration at ADVFN plc with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
However, the earnings per share growth over three years is certainly impressive. Having said that, shareholders may be disappointed with the weak returns over the last three years. While EPS is positive, we'd say shareholders would want better returns before the CEO is paid much more. Whatever your view on compensation, you might want to check if insiders are buying or selling ADVFN shares (free trial).
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.
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