Yahoo Finance We Think The Compensation For QinetiQ Group plc's (LON:QQ.) CEO Looks About Right
CEO Steve Wadey has done a decent job of delivering relatively good performance at QinetiQ Group plc (LON:QQ.) recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 21 July 2021. Here is our take on why we think the CEO compensation looks appropriate.
Check out our latest analysis for QinetiQ Group
How Does Total Compensation For Steve Wadey Compare With Other Companies In The Industry?
According to our data, QinetiQ Group plc has a market capitalization of UK£2.0b, and paid its CEO total annual compensation worth UK£2.6m over the year to March 2021. That's a notable increase of 31% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at UK£512k.
For comparison, other companies in the same industry with market capitalizations ranging between UK£1.4b and UK£4.6b had a median total CEO compensation of UK£3.4m. From this we gather that Steve Wadey is paid around the median for CEOs in the industry. What's more, Steve Wadey holds UK£2.3m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2021 | 2020 | Proportion (2021) |
Salary | UK£512k | UK£610k | 20% |
Other | UK£2.1m | UK£1.4m | 80% |
Total Compensation | UK£2.6m | UK£2.0m | 100% |
Speaking on an industry level, nearly 48% of total compensation represents salary, while the remainder of 52% is other remuneration. QinetiQ Group pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
QinetiQ Group plc's Growth
Over the last three years, QinetiQ Group plc has shrunk its earnings per share by 3.7% per year. It achieved revenue growth of 19% over the last year.
The reduction in EPS, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 QinetiQ Group plc Been A Good Investment?
Most shareholders would probably be pleased with QinetiQ Group plc for providing a total return of 36% over three years. 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.
To Conclude...
Some shareholders will be pleased by the relatively good results, however, the results could still be improved. Still, we think that until shareholders see an improvement in EPS growth, they may find it hard to justify a pay rise for the CEO.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 2 warning signs for QinetiQ Group that investors should be aware of in a dynamic business environment.
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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