Yahoo Finance Is Centrica plc’s (LON:CNA) CEO Paid Enough Relative To Peers?
Iain Conn became the CEO of Centrica plc (LON:CNA) in 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for Centrica
How Does Iain Conn’s Compensation Compare With Similar Sized Companies?
Our data indicates that Centrica plc is worth UK£8.3b, and total annual CEO compensation is UK£2m. That’s actually a decrease on the year before. We looked at a group of companies with market capitalizations over UK£6.2b and the median CEO compensation was UK£4m.
This would give shareholders a good impression of the company, since most large companies pay more, leaving less for shareholders. Though positive, it’s important we delve into the performance of the actual business.
You can see, below, how CEO compensation at Centrica has changed over time.
Is Centrica plc Growing?
Over the last three years Centrica plc has grown its earnings per share (EPS) by an average of 72% per year. It achieved revenue growth of 3.7% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s nice to see a little revenue growth, as this is consistent with healthy business conditions.
It could be important to check this free visual depiction of what analysts expect for the future.
Has Centrica plc Been A Good Investment?
With a three year total loss of 22%, Centrica plc would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
In Summary…
Centrica plc is currently paying its CEO below what is normal for large companies. Since the business is growing, many would argue this 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 Iain Conn receives, but it would be good to see improved returns to shareholders before the remuneration grows too much.
In this case we may want to look deeper into the company. There are some real positives and we could see improved returns in the longer term. So you may want to check if insiders are buying Centrica plc shares with their own money (free access).
Or you might prefer examine intently this intuitive graph showing past earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.