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Keith Neilson became the CEO of Craneware plc (LON:CRW) in 1999, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Comparing Craneware plc's CEO Compensation With the industry
Our data indicates that Craneware plc has a market capitalization of UK£570m, and total annual CEO compensation was reported as US$390k for the year to June 2020. That's a notable decrease of 12% on last year. Notably, the salary which is US$368.4k, represents most of the total compensation being paid.
For comparison, other companies in the same industry with market capitalizations ranging between UK£302m and UK£1.2b had a median total CEO compensation of US$1.0m. That is to say, Keith Neilson is paid under the industry median. What's more, Keith Neilson holds UK£73m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
On an industry level, roughly 85% of total compensation represents salary and 15% is other remuneration. Craneware is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Craneware plc's Growth
Craneware plc has seen its earnings per share (EPS) increase by 7.8% a year over the past three years. The trailing twelve months of revenue was pretty much the same as the prior period.
We're not particularly impressed by the revenue growth, but we're happy with the modest EPS growth. So there are some positives here, but not enough to earn high praise. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Craneware plc Been A Good Investment?
We think that the total shareholder return of 53%, over three years, would leave most Craneware plc shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
As previously discussed, Keith is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. On the other hand, shareholder returns have been have been very pleasing, over the last three years, and that should put a smile on the faces of investors. So, considering these tasty returns, CEO compensation seems quite appropriate.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 2 warning signs (and 1 which is significant) in Craneware we think you should know about.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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