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Is The Berkeley Group Holdings plc (LON:BKG) Excessively Paying Its CEO?

Simply Wall St

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Rob Perrins became the CEO of The Berkeley Group Holdings plc (LON:BKG) in 2009. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Berkeley Group Holdings

How Does Rob Perrins's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that The Berkeley Group Holdings plc has a market cap of UK£4.8b, and is paying total annual CEO compensation of UK£7.8m. (This is based on the year to April 2018). While we always look at total compensation first, we note that the salary component is less, at UK£545k. When we examined a selection of companies with market caps ranging from UK£3.2b to UK£9.6b, we found the median CEO total compensation was UK£2.8m.

As you can see, Rob Perrins is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean The Berkeley Group Holdings plc is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see a visual representation of the CEO compensation at Berkeley Group Holdings, below.

LSE:BKG CEO Compensation, July 20th 2019

Is The Berkeley Group Holdings plc Growing?

Over the last three years The Berkeley Group Holdings plc has grown its earnings per share (EPS) by an average of 14% per year (using a line of best fit). It achieved revenue growth of 9.4% over the last year.

This demonstrates that the company has been improving recently. A good result. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. It could be important to check this free visual depiction of what analysts expect for the future.

Has The Berkeley Group Holdings plc Been A Good Investment?

I think that the total shareholder return of 61%, over three years, would leave most The Berkeley Group Holdings plc shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

We compared total CEO remuneration at The Berkeley Group Holdings plc with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.

However we must not forget that the EPS growth has been very strong over three years. Even better, returns to shareholders have been plentiful, over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. Whatever your view on compensation, you might want to check if insiders are buying or selling Berkeley Group Holdings shares (free trial).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.