Yahoo Finance It's Probably Less Likely That Escape Hunt plc's (LON:ESC) CEO Will See A Huge Pay Rise This Year
The underwhelming share price performance of Escape Hunt plc (LON:ESC) in the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 28 June 2021. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.
See our latest analysis for Escape Hunt
Comparing Escape Hunt plc's CEO Compensation With the industry
At the time of writing, our data shows that Escape Hunt plc has a market capitalization of UK£34m, and reported total annual CEO compensation of UK£220k for the year to December 2020. That's a notable decrease of 8.3% on last year. We note that the salary portion, which stands at UK£198.0k constitutes the majority of total compensation received by the CEO.
In comparison with other companies in the industry with market capitalizations under UK£145m, the reported median total CEO compensation was UK£230k. So it looks like Escape Hunt compensates Richard Harpham in line with the median for the industry. What's more, Richard Harpham holds UK£272k worth of shares in the company in their own name.
Component | 2020 | 2019 | Proportion (2020) |
Salary | UK£198k | UK£220k | 90% |
Other | UK£22k | UK£20k | 10% |
Total Compensation | UK£220k | UK£240k | 100% |
On an industry level, roughly 81% of total compensation represents salary and 19% is other remuneration. Escape Hunt pays out 90% of remuneration in the form of a salary, significantly higher than the industry average. 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.
A Look at Escape Hunt plc's Growth Numbers
Over the past three years, Escape Hunt plc has seen its earnings per share (EPS) grow by 22% per year. Its revenue is down 46% over the previous year.
Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Escape Hunt plc Been A Good Investment?
Few Escape Hunt plc shareholders would feel satisfied with the return of -66% over three years. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.
CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 6 warning signs for Escape Hunt you should be aware of, and 3 of them make us uncomfortable.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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