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Should You Worry About Cranswick plc's (LON:CWK) CEO Pay Cheque?

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Adam Couch became the CEO of Cranswick plc (LON:CWK) in 2012. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Cranswick

How Does Adam Couch's Compensation Compare With Similar Sized Companies?

According to our data, Cranswick plc has a market capitalization of UK£1.4b, and pays its CEO total annual compensation worth UK£3.4m. (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£616k. When we examined a selection of companies with market caps ranging from UK£761m to UK£2.4b, we found the median CEO total compensation was UK£1.3m.

It would therefore appear that Cranswick plc pays Adam Couch 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.

You can see a visual representation of the CEO compensation at Cranswick, below.

LSE:CWK CEO Compensation, April 4th 2019
LSE:CWK CEO Compensation, April 4th 2019

Is Cranswick plc Growing?

On average over the last three years, Cranswick plc has grown earnings per share (EPS) by 14% each year (using a line of best fit). It achieved revenue growth of 6.5% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. It could be important to check this free visual depiction of what analysts expect for the future.

Has Cranswick plc Been A Good Investment?

Boasting a total shareholder return of 35% over three years, Cranswick plc has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

We examined the amount Cranswick 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.

Importantly, though, the company has impressed with its earnings per share growth, over three years. In addition, shareholders have done well over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. Whatever your view on compensation, you might want to check if insiders are buying or selling Cranswick shares (free trial).

Important note: Cranswick may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE 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 editorial-team@simplywallst.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.

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