Yahoo Finance Reach plc's (LON:RCH) CEO Compensation Looks Acceptable To Us And Here's Why
Key Insights
Reach will host its Annual General Meeting on 2nd of May
Total pay for CEO Jim Mullen includes UK£504.0k salary
The total compensation is 34% less than the average for the industry
Reach's three-year loss to shareholders was 62% while its EPS grew by 78% over the past three years
Shareholders may be wondering what CEO Jim Mullen plans to do to improve the less than great performance at Reach plc (LON:RCH) recently. At the next AGM coming up on 2nd of May, they can influence managerial decision making through voting on resolutions, including executive remuneration. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. We think CEO compensation looks appropriate given the data we have put together.
View our latest analysis for Reach
Comparing Reach plc's CEO Compensation With The Industry
At the time of writing, our data shows that Reach plc has a market capitalization of UK£218m, and reported total annual CEO compensation of UK£564k for the year to December 2023. That is, the compensation was roughly the same as last year. In particular, the salary of UK£504.0k, makes up a huge portion of the total compensation being paid to the CEO.
In comparison with other companies in the British Media industry with market capitalizations ranging from UK£80m to UK£320m, the reported median CEO total compensation was UK£858k. Accordingly, Reach pays its CEO under the industry median. Moreover, Jim Mullen also holds UK£513k worth of Reach stock directly under their own name.
Component | 2023 | 2022 | Proportion (2023) |
Salary | UK£504k | UK£501k | 89% |
Other | UK£60k | UK£60k | 11% |
Total Compensation | UK£564k | UK£561k | 100% |
Talking in terms of the industry, salary represented approximately 55% of total compensation out of all the companies we analyzed, while other remuneration made up 45% of the pie. Reach is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Reach plc's Growth
Reach plc's earnings per share (EPS) grew 78% per year over the last three years. It saw its revenue drop 5.4% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Reach plc Been A Good Investment?
With a total shareholder return of -62% over three years, Reach plc shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
The loss to shareholders over the past three years is certainly concerning. This diverges with the robust growth in EPS, suggesting that there is a large discrepancy between share price and fundamentals. A key focus for the board and management will be how to align the share price with fundamentals. In the upcoming AGM, shareholders should take this opportunity to raise these concerns with the board and revisit their investment thesis with regards to the company.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 3 warning signs (and 1 which is a bit concerning) in Reach we think you should know about.
Important note: Reach is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
