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Is Hansteen Holdings PLC (LON:HSTN) Overpaying Its CEO?

Kristin Rankin

Morgan Jones has been the CEO of Hansteen Holdings PLC (LON:HSTN) since 2005. 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. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Hansteen Holdings

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How Does Morgan Jones’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Hansteen Holdings PLC has a market cap of UK£366m, and is paying total annual CEO compensation of UK£1.5m. (This is based on the year to 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at UK£440k. We looked at a group of companies with market capitalizations from UK£157m to UK£627m, and the median CEO compensation was UK£693k.

Thus we can conclude that Morgan Jones receives more in total compensation than the median of a group of companies in the same market, and of similar size to Hansteen Holdings PLC. However, this doesn’t necessarily mean the pay is too high. 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 Hansteen Holdings has changed from year to year.

LSE:HSTN CEO Compensation January 16th 19
LSE:HSTN CEO Compensation January 16th 19

Is Hansteen Holdings PLC Growing?

On average over the last three years, Hansteen Holdings PLC has shrunk earnings per share by 30% each year. It achieved revenue growth of 1.3% over the last year.

Unfortunately, earnings per share have trended lower over the last three years. And the modest revenue growth over 12 months isn’t much comfort against the reduced 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 Hansteen Holdings PLC Been A Good Investment?

Hansteen Holdings PLC has served shareholders reasonably well, with a total return of 30% over three years. But they probably wouldn’t be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary…

We compared the total CEO remuneration paid by Hansteen Holdings PLC, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

We think many shareholders would be underwhelmed with the business growth over the last three years.

And shareholder returns are decent but not great. So we doubt many shareholders would consider the CEO pay to be particularly modest! Shareholders may want to check for free if Hansteen Holdings insiders are buying or selling shares.

Or you might rather take a peek at this analytical visualization of historic cash flow, earnings and revenue.

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.