In This Article:
Simon G. Caffyn has been the CEO of Caffyns plc (LON:CFYN) since 1998, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Check out our latest analysis for Caffyns
Comparing Caffyns plc's CEO Compensation With the industry
At the time of writing, our data shows that Caffyns plc has a market capitalization of UK£7.3m, and reported total annual CEO compensation of UK£319k for the year to March 2020. Notably, that's a decrease of 12% over the year before. In particular, the salary of UK£290.0k, makes up a huge portion of the total compensation being paid to the CEO.
On comparing similar-sized companies in the industry with market capitalizations below UK£155m, we found that the median total CEO compensation was UK£368k. So it looks like Caffyns compensates Simon G. Caffyn in line with the median for the industry. Moreover, Simon G. Caffyn also holds UK£208k worth of Caffyns stock directly under their own name.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | UK£290k | UK£284k | 91% |
| Other | UK£29k | UK£80k | 9% |
| Total Compensation | UK£319k | UK£364k | 100% |
On an industry level, around 70% of total compensation represents salary and 30% is other remuneration. Caffyns pays out 91% of remuneration in the form of a salary, significantly higher than the industry average. 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.
A Look at Caffyns plc's Growth Numbers
Over the last three years, Caffyns plc has shrunk its earnings per share by 93% per year. In the last year, its revenue is down 5.4%.
Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Caffyns plc Been A Good Investment?
Since shareholders would have lost about 33% over three years, some Caffyns plc investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.
To Conclude...
As we touched on above, Caffyns plc is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. On the other hand, EPS 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.