Lance H. Batchelor has been the CEO of Saga plc (LON:SAGA) since 2014. First, this article will compare CEO compensation with compensation at similar sized companies. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
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£650m, and reported total annual CEO compensation of UK£1.2m for the year to January 2019. We think total compensation is more important but we note that the CEO salary is lower, at UK£690k. We looked at a group of companies with market capitalizations from UK£313m to UK£1.3b, and the median CEO total compensation was UK£912k.
It would therefore appear that Saga plc pays Lance H. Batchelor more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Saga has changed over time.
Is Saga plc Growing?
Saga plc has reduced its earnings per share by an average of 77% a year, over the last three years (measured with a line of best fit). It saw its revenue drop 6.6% over the last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.
Has Saga plc Been A Good Investment?
With a three year total loss of 65%, Saga plc would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
We compared the total CEO remuneration paid by Saga plc, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
Neither earnings per share nor revenue have been growing sufficiently to impress us, over the last three years. Arguably worse, investors are without a positive return for the last three years. In our opinion the CEO might be paid too generously! 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).
If you want to buy a stock that is better than Saga, this free list of high return, low debt companies is a great place to look.
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