Yahoo Finance We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Kier Group plc's (LON:KIE) CEO For Now
In the past three years, the share price of Kier Group plc (LON:KIE) has struggled to grow and now shareholders are sitting on a loss. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 17 November 2022. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.
View our latest analysis for Kier Group
Comparing Kier Group plc's CEO Compensation With The Industry
Our data indicates that Kier Group plc has a market capitalization of UK£268m, and total annual CEO compensation was reported as UK£2.2m for the year to June 2022. That's a notable increase of 70% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at UK£750k.
On examining similar-sized companies in the industry with market capitalizations between UK£172m and UK£686m, we discovered that the median CEO total compensation of that group was UK£1.7m. Hence, we can conclude that Andrew O. Davies is remunerated higher than the industry median. Furthermore, Andrew O. Davies directly owns UK£627k worth of shares in the company.
Component | 2022 | 2021 | Proportion (2022) |
Salary | UK£750k | UK£595k | 33% |
Other | UK£1.5m | UK£728k | 67% |
Total Compensation | UK£2.2m | UK£1.3m | 100% |
On an industry level, around 44% of total compensation represents salary and 56% is other remuneration. Kier Group pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Kier Group plc's Growth Numbers
Over the past three years, Kier Group plc has seen its earnings per share (EPS) grow by 98% per year. In the last year, its revenue is down 3.6%.
This demonstrates that the company has been improving recently and is good news for the shareholders. 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 Kier Group plc Been A Good Investment?
Given the total shareholder loss of 20% over three years, many shareholders in Kier Group plc are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.
To Conclude...
Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Kier Group that investors should think about before committing capital to this stock.
Important note: Kier Group 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
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