Jon Stanton became the CEO of The Weir Group PLC (LON:WEIR) in 2016, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Weir Group.
Comparing The Weir Group PLC's CEO Compensation With the industry
According to our data, The Weir Group PLC has a market capitalization of UK£3.8b, and paid its CEO total annual compensation worth UK£1.7m over the year to December 2019. We note that's a decrease of 28% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at UK£682k.
On comparing similar companies from the same industry with market caps ranging from UK£3.1b to UK£9.2b, we found that the median CEO total compensation was UK£2.4m. So it looks like Weir Group compensates Jon Stanton in line with the median for the industry. What's more, Jon Stanton holds UK£1.7m worth of shares in the company in their own name.
On an industry level, roughly 48% of total compensation represents salary and 52% is other remuneration. Weir Group sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at The Weir Group PLC's Growth Numbers
The Weir Group PLC has reduced its earnings per share by 107% a year over the last three years. It saw its revenue drop 11% over the last year.
Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 The Weir Group PLC Been A Good Investment?
Since shareholders would have lost about 22% over three years, some The Weir Group PLC investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.
As we noted earlier, Weir Group pays its CEO in line with similar-sized companies belonging to the same industry. Meanwhile, EPS growth and shareholder returns have been in the red for the last three years. We'd stop short of saying compensation is inappropriate, but we would understand if shareholders had questions regarding a future raise.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for Weir Group that investors should be aware of in a dynamic business environment.
Switching gears from Weir Group, 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.
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