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Is Highcroft Investments Plc's (LON:HCFT) CEO Overpaid Relative To Its Peers?

Simply Wall St

In 2013 Simon Gill was appointed CEO of Highcroft Investments Plc (LON:HCFT). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for Highcroft Investments

How Does Simon Gill's Compensation Compare With Similar Sized Companies?

Our data indicates that Highcroft Investments Plc is worth UK£49m, and total annual CEO compensation was reported as UK£209k for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at UK£108k. We examined a group of similar sized companies, with market capitalizations of below UK£152m. The median CEO total compensation in that group is UK£250k.

That means Simon Gill receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.

You can see a visual representation of the CEO compensation at Highcroft Investments, below.

LSE:HCFT CEO Compensation, January 24th 2020

Is Highcroft Investments Plc Growing?

Over the last three years Highcroft Investments Plc has shrunk its earnings per share by an average of 4.9% per year (measured with a line of best fit). Its revenue is up 7.2% over last year.

Sadly for shareholders, earnings per share are actually down, over 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. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Highcroft Investments Plc Been A Good Investment?

With a total shareholder return of 22% over three years, Highcroft Investments Plc shareholders would, in general, be reasonably content. 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...

Simon Gill is paid around the same as most CEOs of similar size companies.

We're not seeing great strides in earnings per share, and total returns were decent but not amazing in the last three years. We're not saying the CEO pay is too generous, but it's probably fair to say that many shareholders would like to see improved performance, before any pay rise occurs. Shareholders may want to check for free if Highcroft Investments insiders are buying or selling shares.

If you want to buy a stock that is better than Highcroft Investments, this free list of high return, low debt companies is a great place to look.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.