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Stephen King is the CEO of PHSC plc (LON:PHSC). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
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How Does Stephen King's Compensation Compare With Similar Sized Companies?
According to our data, PHSC plc has a market capitalization of UK£1.5m, and pays its CEO total annual compensation worth UK£93k. (This figure is for the year to March 2018). Notably, the salary of UK£90k is the vast majority of the CEO compensation. We took a group of companies with market capitalizations below UK£158m, and calculated the median CEO total compensation to be UK£248k.
A first glance this seems like a real positive for shareholders, since Stephen King is paid less than the average total compensation paid by similar sized companies. However, before we heap on the praise, we should delve deeper to understand business performance.
The graphic below shows how CEO compensation at PHSC has changed from year to year.
Is PHSC plc Growing?
On average over the last three years, PHSC plc has grown earnings per share (EPS) by 26% each year (using a line of best fit). It saw its revenue drop -10% over the last year.
This demonstrates that the company has been improving recently. A good result. Revenue growth is a real positive for growth, but ultimately profits are more important. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has PHSC plc Been A Good Investment?
Since shareholders would have lost about 55% over three years, some PHSC plc shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
PHSC plc is currently paying its CEO below what is normal for companies of its size. Considering the underlying business is growing earnings, this would suggest the pay is modest. Few would deny that the total shareholder return over the last three years could have been a lot better. We're not critical of the remuneration Stephen King receives, but it would be good to see improved returns to shareholders before the remuneration grows too much.