Yahoo Finance How Should Investors Feel About J D Wetherspoon plc's (LON:JDW) CEO Pay?
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John Hutson is the CEO of J D Wetherspoon plc (LON:JDW). 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. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for J D Wetherspoon
How Does John Hutson's Compensation Compare With Similar Sized Companies?
Our data indicates that J D Wetherspoon plc is worth UK£1.5b, and total annual CEO compensation is UK£1.5m. (This is based on the year to July 2018). While we always look at total compensation first, we note that the salary component is less, at UK£603k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of UK£796m to UK£2.5b. The median total CEO compensation was UK£1.2m.
That means John Hutson receives fairly typical remuneration for the CEO of a company that size. 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 J D Wetherspoon has changed from year to year.
Is J D Wetherspoon plc Growing?
On average over the last three years, J D Wetherspoon plc has grown earnings per share (EPS) by 17% each year (using a line of best fit). In the last year, its revenue is up 3.8%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. Shareholders might be interested in this free visualization of analyst forecasts.
Has J D Wetherspoon plc Been A Good Investment?
Most shareholders would probably be pleased with J D Wetherspoon plc for providing a total return of 119% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
John Hutson is paid around what is normal the leaders of comparable size companies.
Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. Indeed, many might consider the pay rather modest, given the solid company performance! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling J D Wetherspoon (free visualization of insider trades).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity 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.
