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Is ASOS Plc's (LON:ASC) CEO Overpaid Relative To Its Peers?

Simply Wall St

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In 2015 Nick Beighton was appointed CEO of ASOS Plc (LON:ASC). 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. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for ASOS

How Does Nick Beighton's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that ASOS Plc has a market cap of UK£3.3b, and is paying total annual CEO compensation of UK£2.9m. (This number is for the twelve months until August 2018). While we always look at total compensation first, we note that the salary component is less, at UK£565k. We examined companies with market caps from UK£1.5b to UK£4.9b, and discovered that the median CEO total compensation of that group was UK£1.9m.

Thus we can conclude that Nick Beighton receives more in total compensation than the median of a group of companies in the same market, and of similar size to ASOS Plc. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see a visual representation of the CEO compensation at ASOS, below.

AIM:ASC CEO Compensation, May 8th 2019

Is ASOS Plc Growing?

ASOS Plc has increased its earnings per share (EPS) by an average of 24% a year, over the last three years (using a line of best fit). Its revenue is up 19% 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. It could be important to check this free visual depiction of what analysts expect for the future.

Has ASOS Plc Been A Good Investment?

ASOS Plc has generated a total shareholder return of 2.1% over three years, so most shareholders wouldn't be too disappointed. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

We examined the amount ASOS Plc pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. We also think investors are doing ok, over the same time period. While it may be worth researching further, we don't see a problem with the CEO pay, given the good EPS growth. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at ASOS.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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.