Yahoo Finance Does Sophos Group plc's (LON:SOPH) CEO Pay Reflect Performance?
Kris Hagerman became the CEO of Sophos Group plc (LON:SOPH) in 2012. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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. This process should give us an idea about how appropriately the CEO is paid.
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See our latest analysis for Sophos Group
How Does Kris Hagerman's Compensation Compare With Similar Sized Companies?
According to our data, Sophos Group plc has a market capitalization of UK£1.6b, and pays its CEO total annual compensation worth US$8.7m. (This number is for the twelve months until March 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$716k. We examined companies with market caps from US$1.0b to US$3.2b, and discovered that the median CEO total compensation of that group was US$1.6m.
Thus we can conclude that Kris Hagerman receives more in total compensation than the median of a group of companies in the same market, and of similar size to Sophos Group plc. However, this doesn't necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at Sophos Group has changed from year to year.
Is Sophos Group plc Growing?
Over the last three years Sophos Group plc has grown its earnings per share (EPS) by an average of 29% per year (using a line of best fit). It achieved revenue growth of 22% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. 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 Sophos Group plc Been A Good Investment?
I think that the total shareholder return of 53%, over three years, would leave most Sophos Group plc shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
We compared the total CEO remuneration paid by Sophos Group plc, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
However we must not forget that the EPS growth has been very strong over three years. Even better, returns to shareholders have been plentiful, over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. So you may want to check if insiders are buying Sophos Group shares with their own money (free access).
If you want to buy a stock that is better than Sophos Group, this free list of high return, low debt companies is a great place to look.
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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.
