Yahoo Finance Our Take On Aggreko's (LON:AGK) CEO Salary
Chris Weston has been the CEO of Aggreko Plc (LON:AGK) since 2015, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Aggreko pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
See our latest analysis for Aggreko
Comparing Aggreko Plc's CEO Compensation With the industry
At the time of writing, our data shows that Aggreko Plc has a market capitalization of UK£1.2b, and reported total annual CEO compensation of UK£1.5m for the year to December 2019. We note that's a small decrease of 7.2% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at UK£750k.
In comparison with other companies in the industry with market capitalizations ranging from UK£763m to UK£2.4b, the reported median CEO total compensation was UK£1.5m. This suggests that Aggreko remunerates its CEO largely in line with the industry average. Furthermore, Chris Weston directly owns UK£419k worth of shares in the company.
Component | 2019 | 2018 | Proportion (2019) |
Salary | UK£750k | UK£750k | 49% |
Other | UK£789k | UK£908k | 51% |
Total Compensation | UK£1.5m | UK£1.7m | 100% |
Speaking on an industry level, nearly 55% of total compensation represents salary, while the remainder of 45% is other remuneration. Aggreko pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at Aggreko Plc's Growth Numbers
Aggreko Plc has reduced its earnings per share by 25% a year over the last three years. In the last year, its revenue is down 9.5%.
Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Aggreko Plc Been A Good Investment?
With a three year total loss of 39% for the shareholders, Aggreko Plc would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
As we touched on above, Aggreko Plc is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. In the meantime, the company has reported declining EPS growth and shareholder returns over the last three years. We'd stop short of saying compensation is inappropriate, but we would understand if shareholders had questions regarding a future raise.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 2 warning signs for Aggreko (of which 1 is significant!) that you should know about in order to have a holistic understanding of the stock.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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