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Should You Worry About Arden Partners plc's (LON:ARDN) CEO Pay Cheque?

Donald Brown has been the CEO of Arden Partners plc (LON:ARDN) since 2017. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for Arden Partners

How Does Donald Brown's Compensation Compare With Similar Sized Companies?

According to our data, Arden Partners plc has a market capitalization of UK£5.0m, and paid its CEO total annual compensation worth UK£237k over the year to October 2018. Notably, the salary of UK£228k is the vast majority of the CEO compensation. We looked at a group of companies with market capitalizations under UK£152m, and the median CEO total compensation was UK£254k.

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So Donald Brown receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

The graphic below shows how CEO compensation at Arden Partners has changed from year to year.

AIM:ARDN CEO Compensation, December 11th 2019
AIM:ARDN CEO Compensation, December 11th 2019

Is Arden Partners plc Growing?

Over the last three years Arden Partners plc has shrunk its earnings per share by an average of 6.6% per year (measured with a line of best fit). It saw its revenue drop 23% over the last year.

Unfortunately, earnings per share have trended lower over the last three years. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Arden Partners plc Been A Good Investment?

Since shareholders would have lost about 42% over three years, some Arden Partners plc shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

Donald Brown is paid around what is normal the leaders of comparable size companies.

The company isn't growing EPS, and shareholder returns have been disappointing. Few would argue that it's wise for the company to pay any more, before returns improve. Shareholders may want to check for free if Arden Partners insiders are buying or selling shares.

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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.