U.S. markets closed
  • S&P Futures

    3,368.75
    +16.75 (+0.50%)
     
  • Dow Futures

    27,837.00
    +173.00 (+0.63%)
     
  • Nasdaq Futures

    11,463.75
    +56.50 (+0.50%)
     
  • Russell 2000 Futures

    1,513.30
    +8.90 (+0.59%)
     
  • Crude Oil

    40.20
    -0.02 (-0.05%)
     
  • Gold

    1,895.30
    -0.20 (-0.01%)
     
  • Silver

    23.64
    +0.14 (+0.60%)
     
  • EUR/USD

    1.1743
    +0.0017 (+0.14%)
     
  • 10-Yr Bond

    0.6770
    +0.0320 (+4.96%)
     
  • Vix

    26.37
    +0.10 (+0.38%)
     
  • GBP/USD

    1.2934
    +0.0014 (+0.10%)
     
  • USD/JPY

    105.5040
    +0.0740 (+0.07%)
     
  • BTC-USD

    10,833.12
    +37.08 (+0.34%)
     
  • CMC Crypto 200

    223.97
    +2.57 (+1.16%)
     
  • FTSE 100

    5,866.10
    -31.40 (-0.53%)
     
  • Nikkei 225

    23,184.93
    -0.19 (-0.00%)
     

Our View On AFH Financial Group's (LON:AFHP) CEO Pay

Simply Wall St

Alan Hudson is the CEO of AFH Financial Group Plc (LON:AFHP), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also assess whether AFH Financial Group pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for AFH Financial Group

Comparing AFH Financial Group Plc's CEO Compensation With the industry

At the time of writing, our data shows that AFH Financial Group Plc has a market capitalization of UK£151m, and reported total annual CEO compensation of UK£710k for the year to October 2019. That's a modest increase of 7.7% on the prior year. Notably, the salary which is UK£550.0k, represents most of the total compensation being paid.

On examining similar-sized companies in the industry with market capitalizations between UK£77m and UK£308m, we discovered that the median CEO total compensation of that group was UK£689k. From this we gather that Alan Hudson is paid around the median for CEOs in the industry. Moreover, Alan Hudson also holds UK£21m worth of AFH Financial Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component

2019

2018

Proportion (2019)

Salary

UK£550k

UK£483k

78%

Other

UK£160k

UK£176k

22%

Total Compensation

UK£710k

UK£659k

100%

On an industry level, around 48% of total compensation represents salary and 52% is other remuneration. AFH Financial Group 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

AFH Financial Group Plc's Growth

Over the past three years, AFH Financial Group Plc has seen its earnings per share (EPS) grow by 48% per year. In the last year, its revenue is up 18%.

This demonstrates that the company has been improving recently and is good news for the shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has AFH Financial Group Plc Been A Good Investment?

We think that the total shareholder return of 47%, over three years, would leave most AFH Financial Group Plc shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

As previously discussed, Alan is compensated close to the median for companies of its size, and which belong to the same industry. Investors would surely be happy to see that returns have been great, and that EPS is up. So one could argue that CEO compensation is quite modest, if you consider company performance! Also, such solid returns might lead to shareholders warming to the idea of a bump in pay.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 1 warning sign for AFH Financial Group that investors should look into moving forward.

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.

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