Yahoo Finance Is Saga plc (LON:SAGA) Overpaying Its CEO?
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In 2014 Lance H. Batchelor was appointed CEO of Saga plc (LON:SAGA). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
View our latest analysis for Saga
How Does Lance H. Batchelor's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Saga plc has a market cap of UK£603m, and is paying total annual CEO compensation of UK£1.1m. (This is based on the year to January 2018). We think total compensation is more important but we note that the CEO salary is lower, at UK£690k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of UK£307m to UK£1.2b. The median total CEO compensation was UK£848k.
So Lance H. Batchelor receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
You can see, below, how CEO compensation at Saga has changed over time.
Is Saga plc Growing?
On average over the last three years, Saga plc has shrunk earnings per share by 36% each year (measured with a line of best fit). In the last year, its revenue is down -3.0%.
Few shareholders would be pleased to read that earnings per share are lower over three years. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Shareholders might be interested in this free visualization of analyst forecasts.
Has Saga plc Been A Good Investment?
Since shareholders would have lost about 71% over three years, some Saga plc shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
In Summary...
Lance H. Batchelor is paid around the same as most CEOs of similar size companies.
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! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Saga (free visualization of insider trades).
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.
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.
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. Thank you for reading.
