In 2013 Ian Crabb was appointed CEO of LSL Property Services plc (LON:LSL). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. 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.
How Does Ian Crabb’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that LSL Property Services plc has a market cap of UK£264m, and is paying total annual CEO compensation of UK£835k. (This number is for the twelve months until December 2017). We think total compensation is more important but we note that the CEO salary is lower, at UK£406k. We examined companies with market caps from UK£151m to UK£605m, and discovered that the median CEO total compensation of that group was UK£633k.
It would therefore appear that LSL Property Services plc pays Ian Crabb more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at LSL Property Services has changed over time.
Is LSL Property Services plc Growing?
Over the last three years LSL Property Services plc has shrunk its earnings per share by an average of 13% per year (measured with a line of best fit). It achieved revenue growth of 4.2% over the last year.
Unfortunately, earnings per share have trended lower over the last three years. The fairly low revenue growth fails to impress given that the earnings per share is down. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has LSL Property Services plc Been A Good Investment?
With a total shareholder return of 10% over three years, LSL Property Services plc shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
We examined the amount LSL Property Services 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.
Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.
And shareholder returns are decent but not great. So you may want to delve deeper, because we don’t think the CEO pay is too low. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling LSL Property Services (free visualization of insider trades).
If you want to buy a stock that is better than LSL Property Services, this free list of high return, low debt companies is a great place to look.
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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Thank you for reading.