Yahoo Finance Our View On SDL's (LON:SDL) CEO Pay
This article will reflect on the compensation paid to Adolfo Hernandez who has served as CEO of SDL plc (LON:SDL) since 2016. This analysis will also assess whether SDL pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
View our latest analysis for SDL
How Does Total Compensation For Adolfo Hernandez Compare With Other Companies In The Industry?
According to our data, SDL plc has a market capitalization of UK£433m, and paid its CEO total annual compensation worth UK£1.4m over the year to December 2019. We note that's a small decrease of 4.9% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at UK£514k.
On examining similar-sized companies in the industry with market capitalizations between UK£154m and UK£617m, we discovered that the median CEO total compensation of that group was UK£511k. Hence, we can conclude that Adolfo Hernandez is remunerated higher than the industry median. Furthermore, Adolfo Hernandez directly owns UK£819k worth of shares in the company.
Component | 2019 | 2018 | Proportion (2019) |
Salary | UK£514k | UK£511k | 36% |
Other | UK£910k | UK£987k | 64% |
Total Compensation | UK£1.4m | UK£1.5m | 100% |
Speaking on an industry level, nearly 67% of total compensation represents salary, while the remainder of 33% is other remuneration. SDL pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
SDL plc's Growth
SDL plc's earnings per share (EPS) grew 28% per year over the last three years. Its revenue is up 16% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has SDL plc Been A Good Investment?
With a total shareholder return of 2.0% over three years, SDL plc has done okay by shareholders. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
To Conclude...
As we touched on above, SDL plc is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, we must not forget that the EPS growth has been very strong over three years. We also note that, over the same time frame, shareholder returns haven't been bad. While it may be worth researching further, we don't see a problem with the high CEO pay, given the good EPS growth.
Whatever your view on compensation, you might want to check if insiders are buying or selling SDL shares (free trial).
Important note: SDL 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.
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.
