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Should You Worry About James Halstead plc's (LON:JHD) CEO Pay?

Simply Wall St

The CEO of James Halstead plc (LON:JHD) is Mark Halstead. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for James Halstead

How Does Mark Halstead's Compensation Compare With Similar Sized Companies?

Our data indicates that James Halstead plc is worth UK£1.1b, and total annual CEO compensation is UK£412k. (This number is for the twelve months until June 2018). It is worth noting that the CEO compensation consists almost entirely of the salary, worth UK£412k. We examined companies with market caps from UK£812m to UK£2.6b, and discovered that the median CEO total compensation of that group was UK£1.4m.

This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.

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

AIM:JHD CEO Compensation, September 8th 2019

Is James Halstead plc Growing?

Over the last three years James Halstead plc has grown its earnings per share (EPS) by an average of 2.0% per year (using a line of best fit). In the last year, its revenue changed by just 0.8%.

I would argue that the improvement in revenue isn't particularly impressive, but the modest improvement in EPS is good. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. You might want to check this free visual report on analyst forecasts for future earnings.

Has James Halstead plc Been A Good Investment?

James Halstead plc has served shareholders reasonably well, with a total return of 24% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

It looks like James Halstead plc pays its CEO less than similar sized companies.

Mark Halstead is paid less than what is normal at similar size companies, and but overall performance has left me uninspired. However I do not find the CEO compensation to be concerning. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling James Halstead (free visualization of insider trades).

Important note: James Halstead 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.