Yahoo Finance Our Take On FW Thorpe's (LON:TFW) CEO Salary
This article will reflect on the compensation paid to Mike Allcock who has served as CEO of FW Thorpe Plc (LON:TFW) since 2010. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for FW Thorpe.
View our latest analysis for FW Thorpe
How Does Total Compensation For Mike Allcock Compare With Other Companies In The Industry?
According to our data, FW Thorpe Plc has a market capitalization of UK£388m, and paid its CEO total annual compensation worth UK£399k over the year to June 2020. We note that's a decrease of 40% compared to last year. In particular, the salary of UK£213.0k, makes up a huge portion of the total compensation being paid to the CEO.
In comparison with other companies in the industry with market capitalizations ranging from UK£150m to UK£601m, the reported median CEO total compensation was UK£387k. This suggests that FW Thorpe remunerates its CEO largely in line with the industry average. Furthermore, Mike Allcock directly owns UK£638k worth of shares in the company.
Component | 2020 | 2019 | Proportion (2020) |
Salary | UK£213k | UK£235k | 53% |
Other | UK£186k | UK£429k | 47% |
Total Compensation | UK£399k | UK£664k | 100% |
On an industry level, around 77% of total compensation represents salary and 23% is other remuneration. FW Thorpe pays a modest slice of remuneration through salary, as compared to the broader industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
FW Thorpe Plc's Growth
Over the last three years, FW Thorpe Plc has shrunk its earnings per share by 3.0% per year. Its revenue is up 2.4% over the last year.
A lack of EPS improvement is not good to see. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has FW Thorpe Plc Been A Good Investment?
With a total shareholder return of 0.9% over three years, FW Thorpe Plc has done okay by shareholders. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
In Summary...
As previously discussed, Mike is compensated close to the median for companies of its size, and which belong to the same industry. According to our analysis, FW Thorpe is suffering from uninspiring EPS growth, and even though shareholder returns are stable, they are hardly impressive. This doesn't compare well with CEO compensation, which is close to the industry median. We wouldn't go as far as saying CEO compensation is inappropriate, but we don't think the executive is underpaid.
CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for FW Thorpe that investors should be aware of in a dynamic business environment.
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.
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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