In 2016 Helen Gordon was appointed CEO of Grainger plc (LON:GRI). 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. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Helen Gordon's Compensation Compare With Similar Sized Companies?
Our data indicates that Grainger plc is worth UK£1.9b, and total annual CEO compensation was reported as UK£1.1m for the year to September 2019. That's less than last year. While we always look at total compensation first, we note that the salary component is less, at UK£479k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of UK£1.5b to UK£4.9b. The median total CEO compensation was UK£1.7m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. Though positive, it's important we delve into the performance of the actual business.
You can see a visual representation of the CEO compensation at Grainger, below.
Is Grainger plc Growing?
Grainger plc has increased its earnings per share (EPS) by an average of 1.5% a year, over the last three years (using a line of best fit). It saw its revenue drop 18% over the last year.
I generally like to see a little revenue growth, but it is good to see EPS growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. You might want to check this free visual report on analyst forecasts for future earnings.
Has Grainger plc Been A Good Investment?
Boasting a total shareholder return of 53% over three years, Grainger plc has done well by shareholders. 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.
It looks like Grainger plc pays its CEO less than similar sized companies.
Helen Gordon receives relatively low remuneration compared to similar sized companies. And the returns to shareholders were great, over the last few years. So, while it might be nice to have better EPS growth, on our analysis the CEO compensation is quite modest. Whatever your view on compensation, you might want to check if insiders are buying or selling Grainger shares (free trial).
If you want to buy a stock that is better than Grainger, this free list of high return, low debt companies is a great place to look.
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