In 2014 Alan Hirzel was appointed CEO of Abcam plc (LON:ABC). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Alan Hirzel's Compensation Compare With Similar Sized Companies?
According to our data, Abcam plc has a market capitalization of UK£2.8b, and paid its CEO total annual compensation worth UK£1.9m over the year to June 2019. That's a fairly small increase of 7.0% on year before. We think total compensation is more important but we note that the CEO salary is lower, at UK£600k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of UK£1.5b to UK£4.8b. The median total CEO compensation was UK£1.7m.
So Alan Hirzel receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
The graphic below shows how CEO compensation at Abcam has changed from year to year.
Is Abcam plc Growing?
Abcam plc has increased its earnings per share (EPS) by an average of 12% a year, over the last three years (using a line of best fit). Its revenue is up 11% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. Shareholders might be interested in this free visualization of analyst forecasts.
Has Abcam plc Been A Good Investment?
Boasting a total shareholder return of 80% over three years, Abcam plc has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Remuneration for Alan Hirzel 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. So one could argue the CEO compensation is quite modest, if you consider company performance! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Abcam (free visualization of insider trades).
If you want to buy a stock that is better than Abcam, this free list of high return, low debt companies is a great place to look.
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