Stephen Marks has been the CEO of French Connection Group PLC (LON:FCCN) since 1969, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for French Connection Group.
How Does Total Compensation For Stephen Marks Compare With Other Companies In The Industry?
At the time of writing, our data shows that French Connection Group PLC has a market capitalization of UK£7.5m, and reported total annual CEO compensation of UK£384k for the year to January 2020. That's mostly flat as compared to the prior year's compensation. We note that the salary portion, which stands at UK£378.0k constitutes the majority of total compensation received by the CEO.
In comparison with other companies in the industry with market capitalizations under UK£153m, the reported median total CEO compensation was UK£366k. This suggests that French Connection Group remunerates its CEO largely in line with the industry average. Moreover, Stephen Marks also holds UK£3.1m worth of French Connection Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Talking in terms of the industry, salary represented approximately 70% of total compensation out of all the companies we analyzed, while other remuneration made up 30% of the pie. French Connection Group pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
French Connection Group PLC's Growth
Over the last three years, French Connection Group PLC has shrunk its earnings per share by 27% per year. Its revenue is down 28% over the previous year.
Overall this is not a very positive result for shareholders. 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. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has French Connection Group PLC Been A Good Investment?
Given the total shareholder loss of 82% over three years, many shareholders in French Connection Group PLC are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
Stephen receives almost all of their compensation through a salary. As we touched on above, French Connection Group 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. Considering overall performance, shareholders will likely hold off support for a raise until results improve.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 3 warning signs for French Connection Group (2 shouldn't be ignored!) that you should be aware of before investing here.
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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