Yahoo Finance Is Electrocomponents plc's (LON:ECM) CEO Paid At A Competitive Rate?
Lindsley Ruth became the CEO of Electrocomponents plc (LON:ECM) in 2015. 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 we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
Check out our latest analysis for Electrocomponents
How Does Lindsley Ruth's Compensation Compare With Similar Sized Companies?
According to our data, Electrocomponents plc has a market capitalization of UK£2.5b, and pays its CEO total annual compensation worth UK£4.2m. (This number is for the twelve months until March 2019). That's below the compensation, last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at UK£619k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of UK£1.6b to UK£5.3b. The median total CEO compensation was UK£2.0m.
As you can see, Lindsley Ruth is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Electrocomponents plc is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at Electrocomponents has changed over time.
Is Electrocomponents plc Growing?
On average over the last three years, Electrocomponents plc has grown earnings per share (EPS) by 46% each year (using a line of best fit). It achieved revenue growth of 11% 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. Shareholders might be interested in this free visualization of analyst forecasts.
Has Electrocomponents plc Been A Good Investment?
I think that the total shareholder return of 100%, over three years, would leave most Electrocomponents plc shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
In Summary...
We compared the total CEO remuneration paid by Electrocomponents plc, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
Importantly, though, the company has impressed with its earnings per share growth, 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. Whatever your view on compensation, you might want to check if insiders are buying or selling Electrocomponents shares (free trial).
Important note: Electrocomponents 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.
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.
