Luke Jeffrey became the CEO of Crimson Tide plc (LON:TIDE) in 2018, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Comparing Crimson Tide plc's CEO Compensation With the industry
Our data indicates that Crimson Tide plc has a market capitalization of UK£17m, and total annual CEO compensation was reported as UK£113k for the year to December 2019. Notably, that's an increase of 17% over the year before. We note that the salary portion, which stands at UK£102.0k constitutes the majority of total compensation received by the CEO.
In comparison with other companies in the industry with market capitalizations under UK£152m, the reported median total CEO compensation was UK£273k. This suggests that Luke Jeffrey is paid below the industry median. Furthermore, Luke Jeffrey directly owns UK£76k worth of shares in the company.
On an industry level, roughly 66% of total compensation represents salary and 34% is other remuneration. It's interesting to note that Crimson Tide pays out a greater portion of remuneration through salary, compared to the 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 Crimson Tide plc's Growth Numbers
Over the past three years, Crimson Tide plc has seen its earnings per share (EPS) grow by 11% per year. In the last year, its revenue is up 39%.
This demonstrates that the company has been improving recently and is good news for the shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Crimson Tide plc Been A Good Investment?
With a total shareholder return of 21% over three years, Crimson Tide plc shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
As we noted earlier, Crimson Tide pays its CEO lower than the norm for similar-sized companies belonging to the same industry. But over the last three years, EPS growth has been growing rapidly, which is a great sign for the company. Shareholder returns, in comparison, have not been as impressive. Shareholder returns could be better but we're pleased with the positive EPS growth. So it's fair to say Luke has done quite well despite modest compensation and shareholders might not be averse to a raise.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 3 warning signs for Crimson Tide that you should be aware of before investing.
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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