Adam Bond has been the CEO of AFC Energy plc (LON:AFC) since 2014. 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. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Adam Bond's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that AFC Energy plc has a market cap of UK£75m, and reported total annual CEO compensation of UK£558k for the year to October 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at UK£300k. We looked at a group of companies with market capitalizations under UK£160m, and the median CEO total compensation was UK£266k.
Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of AFC Energy. Talking in terms of the sector, salary represented approximately 55% of total compensation out of all the companies we analysed, while other remuneration made up 45% of the pie. AFC Energy is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation
As you can see, Adam Bond is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean AFC Energy plc is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance. The graphic below shows how CEO compensation at AFC Energy has changed from year to year.
Is AFC Energy plc Growing?
Over the last three years AFC Energy plc has seen earnings per share (EPS) move in a positive direction by an average of 27% per year (using a line of best fit). It has seen most of its revenue evaporate over the past year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Shareholders might be interested in this free visualization of analyst forecasts.
Has AFC Energy plc Been A Good Investment?
Boasting a total shareholder return of 34% over three years, AFC Energy plc has done well by shareholders. 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.
We compared total CEO remuneration at AFC Energy plc with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. On top of that, in the same period, returns to shareholders have been great. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. Taking a breather from CEO compensation, we've spotted 7 warning signs for AFC Energy (of which 3 are significant!) you should know about in order to have a holistic understanding of the stock.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.
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