Paul Smith is the CEO of Morses Club PLC (LON:MCL). First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. 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 Paul Smith's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Morses Club PLC has a market cap of UK£165m, and reported total annual CEO compensation of UK£709k for the year to February 2019. While we always look at total compensation first, we note that the salary component is less, at UK£293k. When we examined a selection of companies with market caps ranging from UK£76m to UK£304m, we found the median CEO total compensation was UK£475k.
Thus we can conclude that Paul Smith receives more in total compensation than the median of a group of companies in the same market, and of similar size to Morses Club PLC. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at Morses Club has changed from year to year.
Is Morses Club PLC Growing?
Over the last three years Morses Club PLC has grown its earnings per share (EPS) by an average of 26% per year (using a line of best fit). In the last year, its revenue is up 4.6%.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. Shareholders might be interested in this free visualization of analyst forecasts.
Has Morses Club PLC Been A Good Investment?
Morses Club PLC has generated a total shareholder return of 33% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
We examined the amount Morses Club PLC pays its CEO, and compared it to the amount paid by similar sized companies. 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. We also think investors are doing ok, over the same time period. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn't call the CEO pay problematic. So you may want to check if insiders are buying Morses Club shares with their own money (free access).
If you want to buy a stock that is better than Morses Club, this free list of high return, low debt companies is a great place to look.
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