Why Huntsworth plc's (LON:HNT) CEO Pay Matters To You
Paul Taaffe became the CEO of Huntsworth plc (LON:HNT) in 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Paul Taaffe's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Huntsworth plc has a market cap of UK£321m, and reported total annual CEO compensation of UK£2.7m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at UK£699k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. When we examined a selection of companies with market caps ranging from UK£163m to UK£653m, we found the median CEO total compensation was UK£696k.
As you can see, Paul Taaffe is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Huntsworth plc is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at Huntsworth has changed over time.
Is Huntsworth plc Growing?
Huntsworth plc has increased its earnings per share (EPS) by an average of 89% a year, over the last three years (using a line of best fit). Its revenue is up 20% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. It could be important to check this free visual depiction of what analysts expect for the future.
Has Huntsworth plc Been A Good Investment?
Boasting a total shareholder return of 108% over three years, Huntsworth plc has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
We examined the amount Huntsworth plc pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
However we must not forget that the EPS growth has been very strong over three years. Even better, returns to shareholders have been plentiful, over the same time period. As a result of this good performance, the CEO remuneration may well be quite reasonable. Whatever your view on compensation, you might want to check if insiders are buying or selling Huntsworth shares (free trial).
Important note: Huntsworth may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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.
If you spot an error that warrants correction, please contact the editor at email@example.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. Thank you for reading.