Kwan Ng became the CEO of Laura Ashley Holdings plc (LON:ALY) in 2012. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. 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 Kwan Ng's Compensation Compare With Similar Sized Companies?
Our data indicates that Laura Ashley Holdings plc is worth UK£14m, and total annual CEO compensation is UK£250k. (This figure is for the year to June 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at UK£185k. We looked at a group of companies with market capitalizations under UK£162m, and the median CEO total compensation was UK£257k.
So Kwan Ng receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
The graphic below shows how CEO compensation at Laura Ashley Holdings has changed from year to year.
Is Laura Ashley Holdings plc Growing?
On average over the last three years, Laura Ashley Holdings plc has shrunk earnings per share by 144% each year (measured with a line of best fit). Its revenue is down -9.6% over last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has Laura Ashley Holdings plc Been A Good Investment?
With a three year total loss of 92%, Laura Ashley Holdings plc would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
Kwan Ng is paid around what is normal the leaders of comparable size companies.
The company isn't growing EPS, and shareholder returns have been disappointing. Few would argue that it's wise for the company to pay any more, before returns improve. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Laura Ashley Holdings.
Important note: Laura Ashley Holdings 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 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.