Yahoo Finance Our View On Dechra Pharmaceuticals' (LON:DPH) CEO Pay
Ian Page has been the CEO of Dechra Pharmaceuticals PLC (LON:DPH) since 2001, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Dechra Pharmaceuticals.
Check out our latest analysis for Dechra Pharmaceuticals
Comparing Dechra Pharmaceuticals PLC's CEO Compensation With the industry
At the time of writing, our data shows that Dechra Pharmaceuticals PLC has a market capitalization of UK£3.6b, and reported total annual CEO compensation of UK£1.6m for the year to June 2020. That's a notable decrease of 47% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at UK£517k.
On comparing similar companies from the same industry with market caps ranging from UK£1.5b to UK£4.9b, we found that the median CEO total compensation was UK£1.1m. Hence, we can conclude that Ian Page is remunerated higher than the industry median. Moreover, Ian Page also holds UK£21m worth of Dechra Pharmaceuticals stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2020 | 2019 | Proportion (2020) |
Salary | UK£517k | UK£500k | 32% |
Other | UK£1.1m | UK£2.5m | 68% |
Total Compensation | UK£1.6m | UK£3.0m | 100% |
Speaking on an industry level, nearly 44% of total compensation represents salary, while the remainder of 56% is other remuneration. It's interesting to note that Dechra Pharmaceuticals allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Dechra Pharmaceuticals PLC's Growth
Dechra Pharmaceuticals PLC has seen its earnings per share (EPS) increase by 5.4% a year over the past three years. It achieved revenue growth of 6.9% over the last year.
We would argue that the improvement in revenue is good, but isn't particularly impressive, but it is good to see modest EPS growth. So there are some positives here, but not enough to earn high praise. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Dechra Pharmaceuticals PLC Been A Good Investment?
Most shareholders would probably be pleased with Dechra Pharmaceuticals PLC for providing a total return of 60% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
To Conclude...
As previously discussed, Ian is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Importantly though, shareholder returns for the last three years have been excellent. That's why we were hoping EPS growth would match this growth, but sadly that is not the case. All things considered, we don't think there's a reason to criticize CEO compensation, though we hope Dechra Pharmaceuticals will post healthier EPS growth moving forward.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 3 warning signs for Dechra Pharmaceuticals that you should be aware of before investing.
Switching gears from Dechra Pharmaceuticals, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.
