Yahoo Finance How Should Investors React To Spirax-Sarco Engineering plc's (LON:SPX) CEO Pay?
In 2014 Nick Anderson was appointed CEO of Spirax-Sarco Engineering plc (LON:SPX). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
View our latest analysis for Spirax-Sarco Engineering
How Does Nick Anderson's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Spirax-Sarco Engineering plc has a market cap of UK£6.8b, and reported total annual CEO compensation of UK£2.3m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at UK£543k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. When we examined a selection of companies with market caps ranging from UK£3.1b to UK£9.2b, we found the median CEO total compensation was UK£2.6m.
So Nick Anderson receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see, below, how CEO compensation at Spirax-Sarco Engineering has changed over time.
Is Spirax-Sarco Engineering plc Growing?
Over the last three years Spirax-Sarco Engineering plc has grown its earnings per share (EPS) by an average of 26% per year (using a line of best fit). In the last year, its revenue is up 7.1%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Shareholders might be interested in this free visualization of analyst forecasts.
Has Spirax-Sarco Engineering plc Been A Good Investment?
I think that the total shareholder return of 118%, over three years, would leave most Spirax-Sarco Engineering plc shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary...
Remuneration for Nick Anderson is close enough to the median pay for a CEO of a similar sized company .
Shareholders would surely be happy to see that shareholder returns have been great, and the earnings per share are up. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Spirax-Sarco Engineering (free visualization of insider trades).
If you want to buy a stock that is better than Spirax-Sarco Engineering, this free list of high return, low debt companies is a great place to look.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
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