Yahoo Finance Does Dignity plc's (LON:DTY) CEO Salary Compare Well With Others?
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Mike McCollum became the CEO of Dignity plc (LON:DTY) in 2009. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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.
View our latest analysis for Dignity
How Does Mike McCollum's Compensation Compare With Similar Sized Companies?
According to our data, Dignity plc has a market capitalization of UK£333m, and pays its CEO total annual compensation worth UK£1.0m. (This number is for the twelve months until December 2018). Notably, that's an increase of 33% over the year before. We think total compensation is more important but we note that the CEO salary is lower, at UK£512k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of UK£159m to UK£634m. The median total CEO compensation was UK£667k.
As you can see, Mike McCollum is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Dignity plc is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at Dignity has changed over time.
Is Dignity plc Growing?
On average over the last three years, Dignity plc has shrunk earnings per share by 9.8% each year (measured with a line of best fit). Its revenue is down -2.6% over last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.
Has Dignity plc Been A Good Investment?
Given the total loss of 72% over three years, many shareholders in Dignity plc are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
In Summary...
We compared the total CEO remuneration paid by Dignity plc, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
Earnings per share have not grown in three years, and the revenue growth fails to impress us.
Arguably worse, investors are without a positive return for the last three years. This contrasts with the growth in CEO remuneration, year on year. This analysis suggests to us that the CEO is paid too generously! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Dignity (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.
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.
