Karen Hubbard has been the CEO of Card Factory plc (LON:CARD) since 2016. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Karen Hubbard's Compensation Compare With Similar Sized Companies?
According to our data, Card Factory plc has a market capitalization of UK£594m, and paid its CEO total annual compensation worth UK£611k over the year to January 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at UK£471k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of UK£312m to UK£1.2b. The median total CEO compensation was UK£914k.
A first glance this seems like a real positive for shareholders, since Karen Hubbard is paid less than the average total compensation paid by similar sized companies. While this is a good thing, you'll need to understand the business better before you can form an opinion.
You can see a visual representation of the CEO compensation at Card Factory, below.
Is Card Factory plc Growing?
On average over the last three years, Card Factory plc has shrunk earnings per share by 11% each year (measured with a line of best fit). It achieved revenue growth of 4.3% over the last year.
Sadly for shareholders, earnings per share are actually down, over three years. The fairly low revenue growth fails to impress given that the earnings per share is down. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. It could be important to check this free visual depiction of what analysts expect for the future.
Has Card Factory plc Been A Good Investment?
With a three year total loss of 19%, Card Factory plc would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
Card Factory plc is currently paying its CEO below what is normal for companies of its size.
Karen Hubbard is paid less than CEOs of similar size companies, but the company isn't growing and total shareholder returns have been disappointing. While one could argue it is appropriate for the CEO to be paid less than other CEOs of similar sized companies, given company performance, we would not call the pay overly generous. So you may want to check if insiders are buying Card Factory shares with their own money (free access).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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