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Is The Berkeley Group Holdings plc's (LON:BKG) CEO Paid At A Competitive Rate?

Simply Wall St

Rob Perrins has been the CEO of The Berkeley Group Holdings plc (LON:BKG) since 2009. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for Berkeley Group Holdings

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

Our data indicates that The Berkeley Group Holdings plc is worth UK£6.1b, and total annual CEO compensation was reported as UK£7.8m for the year to April 2019. While we always look at total compensation first, we note that the salary component is less, at UK£545k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We examined companies with market caps from UK£3.0b to UK£9.1b, and discovered that the median CEO total compensation of that group was UK£2.6m.

Thus we can conclude that Rob Perrins receives more in total compensation than the median of a group of companies in the same market, and of similar size to The Berkeley Group Holdings plc. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see, below, how CEO compensation at Berkeley Group Holdings has changed over time.

LSE:BKG CEO Compensation, January 1st 2020

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 1.8% per year (using a line of best fit). Its revenue is down 21% over last year.

I would prefer it if there was revenue growth, but it is good to see EPS growth. These two metric are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 85%, 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 the total CEO remuneration paid by The Berkeley Group Holdings plc, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

One might like to have seen stronger growth, but shareholder returns have been pleasing, over the last three years. Considering this fine result for investors, we daresay the CEO compensation might be apt. So you may want to check if insiders are buying Berkeley Group Holdings shares with their own money (free access).

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

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.

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. Thank you for reading.