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In 2005 Morgan Jones was appointed CEO of Hansteen Holdings PLC (LON:HSTN). First, this article will compare CEO compensation with compensation at similar sized companies. 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 method should give us information to assess how appropriately the company pays the CEO.
How Does Morgan Jones's Compensation Compare With Similar Sized Companies?
According to our data, Hansteen Holdings PLC has a market capitalization of UK£407m, and pays its CEO total annual compensation worth UK£22m. (This is based on the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at UK£440k. We looked at a group of companies with market capitalizations from UK£161m to UK£645m, and the median CEO total compensation was UK£682k.
As you can see, Morgan Jones is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Hansteen Holdings 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 Hansteen Holdings, below.
Is Hansteen Holdings PLC Growing?
Over the last three years Hansteen Holdings PLC has shrunk its earnings per share by an average of 7.7% per year (measured with a line of best fit). It saw its revenue drop -12% over the last year.
Sadly for shareholders, earnings per share are actually down, over three years. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has Hansteen Holdings PLC Been A Good Investment?
Boasting a total shareholder return of 48% over three years, Hansteen Holdings PLC has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
We examined the amount Hansteen Holdings PLC pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
We think many shareholders would be underwhelmed with the business growth over the last three years.
However, we can't argue with the strong returns to shareholders, over the same time period. Given this situation we doubt shareholders are particularly concerned about the CEO compensation. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Hansteen Holdings.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity 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 firstname.lastname@example.org. 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.