Yahoo Finance Is Melrose Industries PLC (LON:MRO) Overpaying Its CEO?
Simon Peckham has been the CEO of Melrose Industries PLC (LON:MRO) since 2012. First, this article will compare CEO compensation with compensation at other large companies. 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.
Check out our latest analysis for Melrose Industries
How Does Simon Peckham's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Melrose Industries PLC has a market cap of UK£11b, and reported total annual CEO compensation of UK£1.0m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at UK£490k. We took a group of companies with market capitalizations over UK£6.2b, and calculated the median CEO total compensation to be UK£4.0m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
A first glance this seems like a real positive for shareholders, since Simon Peckham is paid less than the average total compensation paid by other large companies. While this is a good thing, you'll need to understand the business better before you can form an opinion.
You can see, below, how CEO compensation at Melrose Industries has changed over time.
Is Melrose Industries PLC Growing?
On average over the last three years, Melrose Industries PLC has shrunk earnings per share by 56% each year (measured with a line of best fit). It achieved revenue growth of 197% over the last year.
As investors, we are a bit wary of companies that have lower earnings per share, over three years. On the other hand, the strong revenue growth suggests the business is growing. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. It could be important to check this free visual depiction of what analysts expect for the future.
Has Melrose Industries PLC Been A Good Investment?
Boasting a total shareholder return of 36% over three years, Melrose Industries PLC has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
Melrose Industries PLC is currently paying its CEO below what is normal for large companies.
Simon Peckham is paid less than what is normal at large companies, and the total shareholder return has been pleasing over the last three years. Although we could see higher growth, we'd argue the remuneration is modest, based on these observations. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Melrose Industries.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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