The CEO of Dewhurst plc (LON:DWHT) is David Dewhurst. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does David Dewhurst's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Dewhurst plc has a market cap of UK£60m, and reported total annual CEO compensation of UK£405k for the year to September 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at UK£134k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We looked at a group of companies with market capitalizations under UK£162m, and the median CEO total compensation was UK£268k.
Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of Dewhurst. Talking in terms of the sector, salary represented approximately 55% of total compensation out of all the companies we analysed, while other remuneration made up 45% of the pie. Dewhurst sets aside a smaller share of compensation for salary, in comparison to the overall industry.
It would therefore appear that Dewhurst plc pays David Dewhurst more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance. You can see a visual representation of the CEO compensation at Dewhurst, below.
Is Dewhurst plc Growing?
On average over the last three years, Dewhurst plc has shrunk earnings per share by 5.8% each year (measured with a line of best fit). Its revenue is up 23% over last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for me to put aside my concerns around earnings. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.
Has Dewhurst plc Been A Good Investment?
Most shareholders would probably be pleased with Dewhurst plc for providing a total return of 48% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We examined the amount Dewhurst plc pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
Neither earnings per share nor revenue have been growing sufficiently to impress us, over the last three years. But clearly there are some positives, because investors have done well over the same time frame. Given this situation we doubt shareholders are particularly concerned about the CEO compensation. On another note, we've spotted 2 warning signs for Dewhurst that investors should look into moving forward.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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