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Under the guidance of CEO Jonathan Murphy, Assura Plc (LON:AGR) has performed reasonably well recently. As shareholders go into the upcoming AGM on 06 July 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. Here is our take on why we think the CEO compensation looks appropriate.
Comparing Assura Plc's CEO Compensation With the industry
At the time of writing, our data shows that Assura Plc has a market capitalization of UK£2.0b, and reported total annual CEO compensation of UK£1.2m for the year to March 2021. That's mostly flat as compared to the prior year's compensation. We think total compensation is more important but our data shows that the CEO salary is lower, at UK£416k.
On comparing similar companies from the same industry with market caps ranging from UK£1.4b to UK£4.6b, we found that the median CEO total compensation was UK£1.1m. From this we gather that Jonathan Murphy is paid around the median for CEOs in the industry. What's more, Jonathan Murphy holds UK£1.9m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
On an industry level, around 42% of total compensation represents salary and 58% is other remuneration. Assura sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Assura Plc's Growth
Over the past three years, Assura Plc has seen its earnings per share (EPS) grow by 3.7% per year. In the last year, its revenue is up 8.3%.
We're not particularly impressed by the revenue growth, but the modest improvement in EPS is good. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. 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 Assura Plc Been A Good Investment?
Boasting a total shareholder return of 50% over three years, Assura Plc has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. In saying that, any proposed increase to CEO compensation will still be assessed on how reasonable it is based on performance and industry benchmarks.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 3 warning signs for Assura (1 is concerning!) that you should be aware of before investing here.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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