Yahoo Finance Our Take On Castings' (LON:CGS) CEO Salary
Adam Vicary became the CEO of Castings P.L.C. (LON:CGS) in 2017, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Castings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Check out our latest analysis for Castings
How Does Total Compensation For Adam Vicary Compare With Other Companies In The Industry?
At the time of writing, our data shows that Castings P.L.C. has a market capitalization of UK£138m, and reported total annual CEO compensation of UK£345k for the year to March 2020. That's a slightly lower by 3.4% over the previous year. In particular, the salary of UK£290.0k, makes up a huge portion of the total compensation being paid to the CEO.
On comparing similar companies from the same industry with market caps ranging from UK£77m to UK£309m, we found that the median CEO total compensation was UK£545k. That is to say, Adam Vicary is paid under the industry median. Furthermore, Adam Vicary directly owns UK£91k worth of shares in the company.
Component | 2020 | 2019 | Proportion (2020) |
Salary | UK£290k | UK£277k | 84% |
Other | UK£55k | UK£80k | 16% |
Total Compensation | UK£345k | UK£357k | 100% |
Speaking on an industry level, nearly 64% of total compensation represents salary, while the remainder of 36% is other remuneration. It's interesting to note that Castings pays out a greater portion of remuneration through salary, compared to the industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Castings P.L.C.'s Growth
Castings P.L.C. has reduced its earnings per share by 8.2% a year over the last three years. In the last year, its revenue is down 7.7%.
Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Castings P.L.C. Been A Good Investment?
Since shareholders would have lost about 24% over three years, some Castings P.L.C. investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
As we noted earlier, Castings pays its CEO lower than the norm for similar-sized companies belonging to the same industry. While we are quite underwhelmed with EPS growth, the shareholder returns over the past three years have also failed to impress us. It's tough to say that Adam is earning a very high compensation, but shareholders will likely want to see healthier investor returns before agreeing that a raise is in order.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Castings that investors should think about before committing capital to this stock.
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.
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