Why Shaftesbury's (LON:SHB) CEO Pay Matters
This article will reflect on the compensation paid to Brian Bickell who has served as CEO of Shaftesbury PLC (LON:SHB) since 2011. This analysis will also assess whether Shaftesbury pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Check out our latest analysis for Shaftesbury
Comparing Shaftesbury PLC's CEO Compensation With the industry
According to our data, Shaftesbury PLC has a market capitalization of UK£1.8b, and paid its CEO total annual compensation worth UK£1.1m over the year to September 2019. We note that's a decrease of 11% compared to last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at UK£508k.
In comparison with other companies in the industry with market capitalizations ranging from UK£764m to UK£2.4b, the reported median CEO total compensation was UK£1.3m. So it looks like Shaftesbury compensates Brian Bickell in line with the median for the industry. Moreover, Brian Bickell also holds UK£7.4m worth of Shaftesbury 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£508k | UK£498k | 47% |
Other | UK£575k | UK£725k | 53% |
Total Compensation | UK£1.1m | UK£1.2m | 100% |
On an industry level, roughly 38% of total compensation represents salary and 62% is other remuneration. It's interesting to note that Shaftesbury pays out a greater portion of remuneration through salary, compared to the industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Shaftesbury PLC's Growth
Over the last three years, Shaftesbury PLC has shrunk its earnings per share by 80% per year. In the last year, its revenue changed by just 0.5%.
Few shareholders would be pleased to read that earnings have declined. And the flat revenue hardly impresses. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Shaftesbury PLC Been A Good Investment?
Given the total shareholder loss of 39% over three years, many shareholders in Shaftesbury PLC are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.
In Summary...
As we touched on above, Shaftesbury 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. Meanwhile, earnings growth and shareholder returns have been in the red for the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 1 warning sign for Shaftesbury that investors should look into moving forward.
Switching gears from Shaftesbury, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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