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Ian Hawksworth has been the CEO of Capital & Counties Properties PLC (LON:CAPC) since 2010, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Note: The company does not report funds from operations, and as a result, we have used earnings per share in our analysis.
Comparing Capital & Counties Properties PLC's CEO Compensation With the industry
Our data indicates that Capital & Counties Properties PLC has a market capitalization of UK£980m, and total annual CEO compensation was reported as UK£1.6m for the year to December 2019. We note that's an increase of 58% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at UK£617k.
On examining similar-sized companies in the industry with market capitalizations between UK£774m and UK£2.5b, we discovered that the median CEO total compensation of that group was UK£1.4m. From this we gather that Ian Hawksworth is paid around the median for CEOs in the industry. Moreover, Ian Hawksworth also holds UK£940k worth of Capital & Counties Properties stock directly under their own name.
On an industry level, around 38% of total compensation represents salary and 62% is other remuneration. Our data reveals that Capital & Counties Properties allocates salary more or less in line with the wider market. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Capital & Counties Properties PLC's Growth Numbers
Over the last three years, Capital & Counties Properties PLC has shrunk its earnings per share by 96% per year. Its revenue is up 8.7% over the last year.
The decline in EPS is a bit concerning. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. These factors suggest that the business performance wouldn't really justify a high pay packet 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 Capital & Counties Properties PLC Been A Good Investment?
Since shareholders would have lost about 56% over three years, some Capital & Counties Properties PLC investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.
As previously discussed, Ian is compensated close to the median for companies of its size, and which belong to the same industry. Meanwhile, EPS growth and shareholder returns have been in the red for the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 2 warning signs for Capital & Counties Properties you should be aware of, and 1 of them makes us a bit uncomfortable.
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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