Yahoo Finance Should You Be Pleased About The CEO Pay At Serco Group plc's (LON:SRP)
Rupert Soames became the CEO of Serco Group plc (LON:SRP) in 2014. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
Check out our latest analysis for Serco Group
How Does Rupert Soames's Compensation Compare With Similar Sized Companies?
According to our data, Serco Group plc has a market capitalization of UK£2.0b, and paid its CEO total annual compensation worth UK£4.5m over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at UK£850k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. 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.
Thus we can conclude that Rupert Soames receives more in total compensation than the median of a group of companies in the same market, and of similar size to Serco Group plc. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
The graphic below shows how CEO compensation at Serco Group has changed from year to year.
Is Serco Group plc Growing?
Over the last three years Serco Group plc has grown its earnings per share (EPS) by an average of 87% per year (using a line of best fit). In the last year, its revenue is up 4.9%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. It could be important to check this free visual depiction of what analysts expect for the future.
Has Serco Group plc Been A Good Investment?
Serco Group plc has not done too badly by shareholders, with a total return of 9.9%, over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
In Summary...
We compared total CEO remuneration at Serco Group plc with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
However we must not forget that the EPS growth has been very strong over three years. We also note that, over the same time frame, shareholder returns haven't been bad. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn't call the CEO pay problematic. Whatever your view on compensation, you might want to check if insiders are buying or selling Serco Group shares (free trial).
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.
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.
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. Thank you for reading.
