Yahoo Finance A Quick Analysis On DS Smith's (LON:SMDS) CEO Salary
Miles Roberts became the CEO of DS Smith Plc (LON:SMDS) in 2010, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
View our latest analysis for DS Smith
Comparing DS Smith Plc's CEO Compensation With the industry
At the time of writing, our data shows that DS Smith Plc has a market capitalization of UK£3.7b, and reported total annual CEO compensation of UK£1.5m for the year to April 2020. Notably, that's a decrease of 52% over the year before. Notably, the salary which is UK£778.0k, represents most of the total compensation being paid.
On examining similar-sized companies in the industry with market capitalizations between UK£3.1b and UK£9.2b, we discovered that the median CEO total compensation of that group was UK£6.5m. This suggests that Miles Roberts is paid below the industry median. What's more, Miles Roberts holds UK£7.1m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2020 | 2019 | Proportion (2020) |
Salary | UK£778k | UK£758k | 53% |
Other | UK£690k | UK£2.3m | 47% |
Total Compensation | UK£1.5m | UK£3.1m | 100% |
On an industry level, around 57% of total compensation represents salary and 43% is other remuneration. Our data reveals that DS Smith allocates salary more or less in line with the wider market. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at DS Smith Plc's Growth Numbers
Over the last three years, DS Smith Plc has shrunk its earnings per share by 1.5% per year. Its revenue is down 2.1% over the previous year.
The lack of earnings growth is certainly unimpressive. And the impression is worse when you consider revenue is down year-on-year. 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 DS Smith Plc Been A Good Investment?
With a three year total loss of 35% for the shareholders, DS Smith Plc would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.
To Conclude...
As previously discussed, Miles is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. While we are quite underwhelmed with earnings growth, the shareholder returns over the past three years have also failed to impress us. It's tough to say that Miles is earning a very high compensation, but shareholders will likely want to see healthier investor returns before agreeing that a raise is in order.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for DS Smith that investors should think about before committing capital to this stock.
Switching gears from DS Smith, 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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