Yahoo Finance How Much is Grainger's (LON:GRI) CEO Getting Paid?
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Helen Gordon has been the CEO of Grainger plc (LON:GRI) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Grainger pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
View our latest analysis for Grainger
Comparing Grainger plc's CEO Compensation With the industry
At the time of writing, our data shows that Grainger plc has a market capitalization of UK£1.9b, and reported total annual CEO compensation of UK£1.1m for the year to September 2019. That's a notable decrease of 9.0% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at UK£479k.
On examining similar-sized companies in the industry with market capitalizations between UK£1.6b and UK£5.1b, we discovered that the median CEO total compensation of that group was UK£856k. From this we gather that Helen Gordon is paid around the median for CEOs in the industry. Furthermore, Helen Gordon directly owns UK£696k worth of shares in the company.
Component | 2019 | 2018 | Proportion (2019) |
Salary | UK£479k | UK£468k | 45% |
Other | UK£589k | UK£706k | 55% |
Total Compensation | UK£1.1m | UK£1.2m | 100% |
On an industry level, roughly 54% of total compensation represents salary and 46% is other remuneration. Grainger pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Grainger plc's Growth Numbers
Over the last three years, Grainger plc has shrunk its earnings per share by 3.0% per year. In the last year, its revenue is down 16%.
Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Grainger plc Been A Good Investment?
Grainger plc has served shareholders reasonably well, with a total return of 25% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
To Conclude...
As previously discussed, Helen is compensated close to the median for companies of its size, and which belong to the same industry. Grainger has had a tough time in recent years, with declining earnings growth, and although shareholder returns are stable, they are hardly worth celebrating. These figures do not go well against CEO compensation, which is more or less equal to the industry median. We would stop short of the compensation is inappropriate, but we can't say the executive is underpaid.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 3 warning signs for Grainger (1 is significant!) that you should be aware of before investing here.
Switching gears from Grainger, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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