Yahoo Finance Is SSE plc’s (LON:SSE) CEO Overpaid Relative To Its Peers?
In 2013 Alistair Phillips-Davies was appointed CEO of SSE plc (LON:SSE). This analysis aims first to contrast CEO compensation with other large companies. Next, we’ll consider growth that the business demonstrates. 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 SSE
How Does Alistair Phillips-Davies’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that SSE plc has a market cap of UK£11.6b, and is paying total annual CEO compensation of UK£3m. That’s less than last year. We looked at a group of companies with market capitalizations over UK£6.2b and the median CEO compensation was UK£4m.
A first glance this seems like a real positive for shareholders, since Alistair Phillips-Davies is paid less than the average compensation paid by other large companies. Though positive, it’s important we delve into the performance of the actual business.
You can see, below, how CEO compensation at SSE has changed over time.
Is SSE plc Growing?
Over the last three years SSE plc has grown its earnings per share (EPS) by an average of 34% per year. In the last year, its revenue is up 7.5%.
This demonstrates that the company has been improving recently. A good result. It’s nice to see a little revenue growth, as this is consistent with healthy business conditions.
Shareholders might be interested in this free visualization of analyst forecasts. .
Has SSE plc Been A Good Investment?
Given the total loss of 13% over three years, many shareholders in SSE plc are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary…
It appears that SSE plc remunerates its CEO below most large companies. Considering the underlying business is growing earnings, this would suggest the pay is modest. Despite some positives, it is likely that shareholders wanted better returns, given the performance over the last three years. So while we don’t think, Alistair Phillips-Davies is paid too much, shareholders may hope that business performance translates to investment returns before pay rises are given out.
When I see fairly low remuneration, combined with earnings per share growth, but without big share price gains, it makes me want to research the potential for future gains. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling SSE plc (free visualization of insider trades).
Or you might prefer gaze upon this detailed graph of past earnings, revenue and cash flow .
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.
