What Can We Make Of HSS Hire Group's (LON:HSS) CEO Compensation?

Steve Ashmore became the CEO of HSS Hire Group plc (LON:HSS) 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 evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for HSS Hire Group

How Does Total Compensation For Steve Ashmore Compare With Other Companies In The Industry?

At the time of writing, our data shows that HSS Hire Group plc has a market capitalization of UK£44m, and reported total annual CEO compensation of UK£551k for the year to December 2019. Notably, that's a decrease of 19% over the year before. Notably, the salary which is UK£368.0k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under UK£151m, the reported median total CEO compensation was UK£219k. This suggests that Steve Ashmore is paid more than the median for the industry. Furthermore, Steve Ashmore directly owns UK£82k worth of shares in the company.

Component	2019	2018	Proportion (2019)
Salary	UK£368k	UK£363k	67%
Other	UK£183k	UK£315k	33%
Total Compensation	UK£551k	UK£678k	100%

Talking in terms of the industry, salary represented approximately 52% of total compensation out of all the companies we analyzed, while other remuneration made up 48% of the pie. According to our research, HSS Hire Group has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

ceo-compensation

A Look at HSS Hire Group plc's Growth Numbers

Over the past three years, HSS Hire Group plc has seen its earnings per share (EPS) grow by 48% per year. Its revenue is up 1.7% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has HSS Hire Group plc Been A Good Investment?

With a three year total loss of 34% for the shareholders, HSS Hire Group plc would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As previously discussed, Steve is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, we must not forget that the EPS growth has been very strong, but it's disappointing to see negative shareholder returns over the same period. Although we'd stop short of calling it inappropriate, we think Steve is earning a very handsome sum.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 2 warning signs (and 1 which can't be ignored) in HSS Hire Group we think you should know about.

Important note: HSS Hire Group is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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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