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How Should Investors Feel About Clarkson PLC’s (LON:CKN) CEO Pay?

Andi Case has been the CEO of Clarkson PLC (LON:CKN) since 2008. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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.

View our latest analysis for Clarkson

How Does Andi Case’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Clarkson PLC has a market cap of UK£631m, and is paying total annual CEO compensation of UK£4.0m. (This figure is for the year to 2017). While we always look at total compensation first, we note that the salary component is less, at UK£550k. We looked at a group of companies with market capitalizations from UK£318m to UK£1.3b, and the median CEO compensation was UK£1.0m.

As you can see, Andi Case is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Clarkson PLC is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

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

LSE:CKN CEO Compensation December 17th 18

Is Clarkson PLC Growing?

Over the last three years Clarkson PLC has grown its earnings per share (EPS) by an average of 19% per year. In the last year, its revenue is up 1.3%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s also good to see modest revenue growth, suggesting the underlying business is healthy.

You might want to check this free visual report on analyst forecasts for future earnings.

Has Clarkson PLC Been A Good Investment?

Given the total loss of 3.5% over three years, many shareholders in Clarkson PLC are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary…

We compared the total CEO remuneration paid by Clarkson 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.

Importantly, though, the company has impressed with its earnings per share growth, over three years. On the other hand returns to investors over the same period have probably disappointed many. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. Shareholders may want to check for free if Clarkson insiders are buying or selling shares.

Or you could feast your eyes on this interactive graph depicting past earnings, cash flow 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.