Our View On Universe Group's (LON:UNG) CEO Pay

Jeremy Michael Lewis has been the CEO of Universe Group plc (LON:UNG) since 2013, 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 Universe Group.

See our latest analysis for Universe Group

How Does Total Compensation For Jeremy Michael Lewis Compare With Other Companies In The Industry?

Our data indicates that Universe Group plc has a market capitalization of UK£16m, and total annual CEO compensation was reported as UK£289k for the year to December 2019. That's a notable increase of 11% on last year. Notably, the salary which is UK£227.0k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under UK£153m, the reported median total CEO compensation was UK£243k. This suggests that Universe Group remunerates its CEO largely in line with the industry average.

Talking in terms of the industry, salary represented approximately 65% of total compensation out of all the companies we analyzed, while other remuneration made up 35% of the pie. Universe Group pays out 79% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Universe Group plc's Growth Numbers

Universe Group plc has reduced its earnings per share by 73% a year over the last three years. In the last year, its revenue is up 13%.

Overall this is not a very positive result for shareholders. While the revenue growth is good to see, it is outweighed by the fact that earnings are down, over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Universe Group plc Been A Good Investment?

Since shareholders would have lost about 41% over three years, some Universe Group plc investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As we noted earlier, Universe Group pays its CEO in line with similar-sized companies belonging to the same industry. On the other hand, earnings growth and total shareholder return have been negative for the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 3 warning signs for Universe Group (of which 1 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.