David Stevens became the CEO of Admiral Group plc (LON:ADM) in 2016. First, this article will compare CEO compensation with compensation at similar sized 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does David Stevens's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Admiral Group plc has a market cap of UK£6.1b, and reported total annual CEO compensation of UK£404k for the year to December 2018. It is worth noting that the CEO compensation consists almost entirely of the salary, worth UK£399k. We looked at a group of companies with market capitalizations from UK£3.1b to UK£9.2b, and the median CEO total compensation was UK£2.6m.
Most shareholders would consider it a positive that David Stevens takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.
You can see a visual representation of the CEO compensation at Admiral Group, below.
Is Admiral Group plc Growing?
Over the last three years Admiral Group plc has grown its earnings per share (EPS) by an average of 18% per year (using a line of best fit). In the last year, its revenue is up 12%.
This demonstrates that the company has been improving recently. A good result. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. You might want to check this free visual report on analyst forecasts for future earnings.
Has Admiral Group plc Been A Good Investment?
Most shareholders would probably be pleased with Admiral Group plc for providing a total return of 50% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Admiral Group plc is currently paying its CEO below what is normal for companies of its size.
Considering the underlying business is growing earnings, this would suggest the pay is modest. The strong history of shareholder returns might even have some thinking that David Stevens deserves a raise! Most shareholders like to see a modestly paid CEO combined with strong performance by the company. 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).
Important note: Admiral Group may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.
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