Is PCF Group plc's (LON:PCF) CEO Salary Justified?
Scott Maybury has been the CEO of PCF Group plc (LON:PCF) since 2008. 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 - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
See our latest analysis for PCF Group
How Does Scott Maybury's Compensation Compare With Similar Sized Companies?
Our data indicates that PCF Group plc is worth UK£51m, and total annual CEO compensation was reported as UK£476k for the year to June 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at UK£250k. We took a group of companies with market capitalizations below UK£164m, and calculated the median CEO total compensation to be UK£275k.
Next, let's break down remuneration compositions to understand how the industry and company compare with each other. Talking in terms of the sector, salary represented approximately 53% of total compensation out of all the companies we analysed, while other remuneration made up 47% of the pie. So it seems like there isn't a significant difference between PCF Group and the broader market, in terms of salary allocation in the overall compensation package.
Thus we can conclude that Scott Maybury receives more in total compensation than the median of a group of companies in the same market, and of similar size to PCF Group plc. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business. The graphic below shows how CEO compensation at PCF Group has changed from year to year.
Is PCF Group plc Growing?
Over the last three years PCF Group plc has seen earnings per share (EPS) move in a positive direction by an average of 11% per year (using a line of best fit). It achieved revenue growth of 51% over the last year.
This demonstrates that the company has been improving recently. A good result. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. You might want to check this free visual report on analyst forecasts for future earnings.
Has PCF Group plc Been A Good Investment?
Since shareholders would have lost about 8.8% over three years, some PCF Group plc shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
We examined the amount PCF Group plc pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
However, the earnings per share growth over three years is certainly impressive. Having said that, shareholders may be disappointed with the weak returns over the last three years. While EPS is moving in the right direction, we'd say shareholders would want better returns before the CEO is paid much more. Shifting gears from CEO pay for a second, we've spotted 4 warning signs for PCF Group you should be aware of, and 2 of them shouldn't be ignored.
If you want to buy a stock that is better than PCF Group, this free list of high return, low debt companies is a great place to look.
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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. Thank you for reading.
