Yahoo Finance Is Admiral Group plc’s (LON:ADM) CEO Pay Justified?
In 2016 David Stevens was appointed CEO of Admiral Group plc (LON:ADM). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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. This process should give us an idea about how appropriately the CEO is paid.
Check out our latest analysis for Admiral Group
How Does David Stevens’s Compensation Compare With Similar Sized Companies?
According to our data, Admiral Group plc has a market capitalization of UK£5.8b, and pays its CEO total annual compensation worth UK£395k. (This is based on the year to December 2017). It is worth noting that the CEO compensation consists almost entirely of the salary, worth UK£391k. We looked at a group of companies with market capitalizations from UK£3.1b to UK£9.2b, and the median CEO compensation was UK£2.5m.
Most shareholders would consider it a positive that David Stevens takes less compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it’s important we delve into the performance of the actual business.
The graphic below shows how CEO compensation at Admiral Group has changed from year to year.
Is Admiral Group plc Growing?
On average over the last three years, Admiral Group plc has grown earnings per share (EPS) by 11% each year (using a line of best fit). Its revenue is up 12% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Shareholders might be interested in this free visualization of analyst forecasts.
Has Admiral Group plc Been A Good Investment?
Boasting a total shareholder return of 34% over three years, Admiral Group 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.
In Summary…
Admiral Group plc is currently paying its CEO below what is normal for companies of its size. Since the business is growing, many would argue this suggests the pay is modest. And given most shareholders are probably very happy with recent returns, you might even think that David Stevens deserves a raise!
It is relatively rare to see a modestly paid CEO when performance is so impressive. It would be even more positive if company insiders are buying shares. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Admiral Group (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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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. Thank you for reading.
