Yahoo Finance Is DS Smith Plc's (LON:SMDS) CEO Pay Fair?
Miles Roberts became the CEO of DS Smith Plc (LON:SMDS) in 2010. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for DS Smith
How Does Miles Roberts's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that DS Smith Plc has a market cap of UK£5.3b, and reported total annual CEO compensation of UK£3.0m for the year to April 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at UK£758k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We looked at a group of companies with market capitalizations from UK£3.0b to UK£9.1b, and the median CEO total compensation was UK£2.6m.
So Miles Roberts is paid around the average of the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
The graphic below shows how CEO compensation at DS Smith has changed from year to year.
Is DS Smith Plc Growing?
Over the last three years DS Smith Plc has shrunk its earnings per share by an average of 2.1% per year (measured with a line of best fit). Its revenue is up 6.0% over last year.
In the last three years the company has failed to grow earnings per share. The fairly low revenue growth fails to impress given that the earnings per share is down. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.
Has DS Smith Plc Been A Good Investment?
With a total shareholder return of 9.1% over three years, DS Smith Plc has done okay by shareholders. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
In Summary...
Miles Roberts is paid around what is normal the leaders of comparable size companies.
We're not seeing great strides in earnings per share, and total returns were decent but not amazing in the last three years. We're not saying the CEO pay is too generous, but it's probably fair to say that many shareholders would like to see improved performance, before any pay rise occurs. Whatever your view on compensation, you might want to check if insiders are buying or selling DS Smith shares (free trial).
If you want to buy a stock that is better than DS Smith, this free list of high return, low debt companies is a great place to look.
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.
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. Thank you for reading.
