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Tom Franks has been the CEO of Camellia Plc (LON:CAM) since 2015, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Camellia pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing Camellia Plc's CEO Compensation With the industry
According to our data, Camellia Plc has a market capitalization of UK£226m, and paid its CEO total annual compensation worth UK£637k over the year to December 2019. That's a modest increase of 3.3% on the prior year. Notably, the salary which is UK£594.0k, represents most of the total compensation being paid.
On examining similar-sized companies in the industry with market capitalizations between UK£79m and UK£317m, we discovered that the median CEO total compensation of that group was UK£527k. So it looks like Camellia compensates Tom Franks in line with the median for the industry.
On an industry level, roughly 78% of total compensation represents salary and 22% is other remuneration. Camellia is paying a higher share of its remuneration through a salary in comparison to the overall industry. 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.
Camellia Plc's Growth
Over the last three years, Camellia Plc has shrunk its earnings per share by 3.7% per year. In the last year, its revenue is down 5.9%.
Overall this is not a very positive result for shareholders. 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, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Camellia Plc Been A Good Investment?
With a three year total loss of 19% for the shareholders, Camellia Plc would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.
As we noted earlier, Camellia pays its CEO in line with similar-sized companies belonging to the same industry. On the other hand, earnings growth and total shareholder return have been negative for the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Camellia that investors should think about before committing capital to this stock.
Switching gears from Camellia, 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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