What Did Babcock International Group PLC's (LON:BAB) CEO Take Home Last Year?
In 2016 Archie Bethel was appointed CEO of Babcock International Group PLC (LON:BAB). 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 method should give us information to assess how appropriately the company pays the CEO.
Check out our latest analysis for Babcock International Group
How Does Archie Bethel's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Babcock International Group PLC has a market cap of UK£3.1b, and reported total annual CEO compensation of UK£2.0m for the year to March 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at UK£780k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. When we examined a selection of companies with market caps ranging from UK£1.5b to UK£4.9b, we found the median CEO total compensation was UK£1.7m.
That means Archie Bethel receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
You can see a visual representation of the CEO compensation at Babcock International Group, below.
Is Babcock International Group PLC Growing?
Over the last three years Babcock International Group PLC has shrunk its earnings per share by an average of 12% per year (measured with a line of best fit). It saw its revenue drop 4.0% over the last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.
Has Babcock International Group PLC Been A Good Investment?
Given the total loss of 26% over three years, many shareholders in Babcock International Group PLC are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary...
Remuneration for Archie Bethel is close enough to the median pay for a CEO of a similar sized company .
The company isn't growing EPS, and shareholder returns have been disappointing. Few would argue that it's wise for the company to pay any more, before returns improve. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Babcock International Group (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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