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In 2013 Peter Cruddas was appointed CEO of CMC Markets Plc (LON:CMCX). 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 we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Peter Cruddas's Compensation Compare With Similar Sized Companies?
According to our data, CMC Markets Plc has a market capitalization of UK£229m, and pays its CEO total annual compensation worth UK£846k. (This figure is for the year to March 2018). We think total compensation is more important but we note that the CEO salary is lower, at UK£420k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of UK£77m to UK£309m. The median total CEO compensation was UK£505k.
It would therefore appear that CMC Markets Plc pays Peter Cruddas more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at CMC Markets has changed from year to year.
Is CMC Markets Plc Growing?
Earnings per share at CMC Markets Plc are much the same as they were three years ago, albeit slightly lower, based on the trend. Its revenue is down -4.2% over last year.
The lack of earnings per share growth in the last three years is unimpressive. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. It could be important to check this free visual depiction of what analysts expect for the future.
Has CMC Markets Plc Been A Good Investment?
Given the total loss of 64% over three years, many shareholders in CMC Markets Plc are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
We compared total CEO remuneration at CMC Markets Plc with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.
We think many shareholders would be underwhelmed with the business growth over the last three years.
Arguably worse, investors are without a positive return for the last three years. Some might well form the view that the CEO is paid too generously! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling CMC Markets (free visualization of insider trades).
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 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.