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How Much Did Billington Holdings' (LON:BILN) CEO Pocket Last Year?

Simply Wall St
·4 mins read

Mark Smith became the CEO of Billington Holdings Plc (LON:BILN) in 2015, 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.

Check out our latest analysis for Billington Holdings

How Does Total Compensation For Mark Smith Compare With Other Companies In The Industry?

At the time of writing, our data shows that Billington Holdings Plc has a market capitalization of UK£36m, and reported total annual CEO compensation of UK£292k for the year to December 2019. That's a notable increase of 9.8% on last year. In particular, the salary of UK£212.0k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the industry with market capitalizations below UK£155m, we found that the median total CEO compensation was UK£355k. So it looks like Billington Holdings compensates Mark Smith in line with the median for the industry. What's more, Mark Smith holds UK£41k worth of shares in the company in their own name.

Component

2019

2018

Proportion (2019)

Salary

UK£212k

UK£180k

73%

Other

UK£80k

UK£86k

27%

Total Compensation

UK£292k

UK£266k

100%

On an industry level, around 63% of total compensation represents salary and 37% is other remuneration. Billington Holdings is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

ceo-compensation
ceo-compensation

A Look at Billington Holdings Plc's Growth Numbers

Over the last three years, Billington Holdings Plc has shrunk its earnings per share by 3.0% per year. In the last year, its revenue is up 9.5%.

A lack of EPS improvement is not good to see. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Billington Holdings Plc Been A Good Investment?

Billington Holdings Plc has generated a total shareholder return of 18% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

As we touched on above, Billington Holdings Plc is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Billington Holdings has had a poor showing when it comes to EPS growth, and it's tough to say that shareholder returns have done much to excite us. This doesn't compare well with CEO compensation, which is close to the industry median. We would stop short of the compensation is inappropriate, but we can't say the executive is underpaid.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Billington Holdings that investors should think about before committing capital to this stock.

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.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.