What Can We Learn About Capital's (LON:CAPD) CEO Compensation?

Simply Wall St
·3 min read

The CEO of Capital Limited (LON:CAPD) is Jamie Boyton, and this article examines 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.

Check out our latest analysis for Capital

How Does Total Compensation For Jamie Boyton Compare With Other Companies In The Industry?

Our data indicates that Capital Limited has a market capitalization of UK£90m, and total annual CEO compensation was reported as US$570k for the year to December 2019. Notably, that's a decrease of 24% over the year before. Notably, the salary which is US$400.0k, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below UK£153m, reported a median total CEO compensation of US$536k. So it looks like Capital compensates Jamie Boyton in line with the median for the industry. Moreover, Jamie Boyton also holds UK£14m worth of Capital stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component

2019

2018

Proportion (2019)

Salary

US$400k

US$400k

70%

Other

US$170k

US$350k

30%

Total Compensation

US$570k

US$750k

100%

On an industry level, roughly 70% of total compensation represents salary and 30% is other remuneration. Capital is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. 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.

ceo-compensation
ceo-compensation

Capital Limited's Growth

Over the past three years, Capital Limited has seen its earnings per share (EPS) grow by 62% per year. Its revenue is up 7.5% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. 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 Capital Limited Been A Good Investment?

We think that the total shareholder return of 86%, over three years, would leave most Capital Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

As we noted earlier, Capital pays its CEO in line with similar-sized companies belonging to the same industry. Investors would surely be happy to see that returns have been great, and that EPS is up. So one could argue that CEO compensation is quite modest, if you consider company performance! Also, such solid returns might lead to shareholders warming to the idea of a bump in pay.

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 Capital (2 make us uncomfortable!) 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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