Is GAIN Capital Holdings Inc (NYSE:GCAP) Excessively Paying Its CEO?
Glenn Stevens became the CEO of GAIN Capital Holdings Inc (NYSE:GCAP) in 2007. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
See our latest analysis for GAIN Capital Holdings
How Does Glenn Stevens’s Compensation Compare With Similar Sized Companies?
Our data indicates that GAIN Capital Holdings Inc is worth US$346m, and total annual CEO compensation is US$2m. That’s actually a decrease on the year before. We examined companies with market caps from US$200m to US$800m, and discovered that the median CEO compensation of that group was US$2m.
As you can see, Glenn Stevens is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean GAIN Capital Holdings Inc is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at GAIN Capital Holdings has changed over time.
Is GAIN Capital Holdings Inc Growing?
On average over the last three years, GAIN Capital Holdings Inc has shrunk earnings per share by 8.6% each year. Its revenue is up 8.3% over last year.
Unfortunately, earnings per share have trended lower over the last three years. The modest increase in revenue in the last year isn’t enough to make me overlook the disappointing change in earnings per share. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration.
Shareholders might be interested in this free visualization of analyst forecasts. .
Has GAIN Capital Holdings Inc Been A Good Investment?
With a total shareholder return of 3.6% over three years, GAIN Capital Holdings Inc has done okay by shareholders. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
In Summary…
We examined the amount GAIN Capital Holdings Inc pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
Earnings per share have not grown in three years, and the revenue growth fails to impress us.
And while shareholder returns have been respectable, they have hardly been superb. So we think more research is needed, but we don’t think the CEO underpaid. So you may want to check if insiders are buying GAIN Capital Holdings Inc shares with their own money (free access).
Or you might prefer this data-rich interactive visualization of historic revenue and earnings.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
