In 2016 Paul Waterman was appointed CEO of Elementis plc (LON:ELM). 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 - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Paul Waterman's Compensation Compare With Similar Sized Companies?
Our data indicates that Elementis plc is worth UK£959m, and total annual CEO compensation was reported as US$1.2m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$651k. When we examined a selection of companies with market caps ranging from UK£773m to UK£2.5b, we found the median CEO total compensation was UK£1.4m.
That means Paul Waterman receives fairly typical remuneration for the CEO of a company that size. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
The graphic below shows how CEO compensation at Elementis has changed from year to year.
Is Elementis plc Growing?
On average over the last three years, Elementis plc has shrunk earnings per share by 9.5% each year (measured with a line of best fit). It achieved revenue growth of 3.6% over the last year.
Unfortunately, earnings per share have trended lower over the last three years. 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 Elementis plc Been A Good Investment?
Given the total loss of 21% over three years, many shareholders in Elementis plc are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
Remuneration for Paul Waterman is close enough to the median pay for a CEO of a similar sized company .
Returns have been disappointing and the company is not growing its earnings per share. Suffice it to say, we don't think the CEO is underpaid! Shareholders may want to check for free if Elementis insiders are buying or selling shares.
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.
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