Yahoo Finance We Think Cloudcall Group plc's (LON:CALL) CEO Compensation Package Needs To Be Put Under A Microscope
Shareholders will probably not be too impressed with the underwhelming results at Cloudcall Group plc (LON:CALL) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 24 May 2021. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. The data we present below explains why we think CEO compensation is not consistent with recent performance.
See our latest analysis for Cloudcall Group
Comparing Cloudcall Group plc's CEO Compensation With the industry
According to our data, Cloudcall Group plc has a market capitalization of UK£34m, and paid its CEO total annual compensation worth UK£248k over the year to December 2020. That's a notable increase of 9.7% on last year. We note that the salary portion, which stands at UK£226.0k constitutes the majority of total compensation received by the CEO.
For comparison, other companies in the industry with market capitalizations below UK£142m, reported a median total CEO compensation of UK£262k. So it looks like Cloudcall Group compensates Simon Cleaver in line with the median for the industry. What's more, Simon Cleaver holds UK£602k worth of shares in the company in their own name.
Component | 2020 | 2019 | Proportion (2020) |
Salary | UK£226k | UK£204k | 91% |
Other | UK£22k | UK£22k | 9% |
Total Compensation | UK£248k | UK£226k | 100% |
Speaking on an industry level, nearly 46% of total compensation represents salary, while the remainder of 54% is other remuneration. According to our research, Cloudcall Group has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at Cloudcall Group plc's Growth Numbers
Over the last three years, Cloudcall Group plc has shrunk its earnings per share by 5.0% per year. In the last year, its revenue is up 3.7%.
Few shareholders would be pleased to read that EPS have declined. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Cloudcall Group plc Been A Good Investment?
With a total shareholder return of -62% over three years, Cloudcall Group plc shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.
To Conclude...
Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.
CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 5 warning signs for Cloudcall Group you should be aware of, and 2 of them are a bit unpleasant.
Switching gears from Cloudcall Group, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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