In 1998 Jim Gibson was appointed CEO of Big Yellow Group Plc (LON:BYG). 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. 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.
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How Does Jim Gibson's Compensation Compare With Similar Sized Companies?
Our data indicates that Big Yellow Group Plc is worth UK£1.7b, and total annual CEO compensation is UK£2.2m. (This is based on the year to March 2018). We think total compensation is more important but we note that the CEO salary is lower, at UK£302k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of UK£791m to UK£2.5b. The median total CEO compensation was UK£1.5m.
It would therefore appear that Big Yellow Group Plc pays Jim Gibson more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see a visual representation of the CEO compensation at Big Yellow Group, below.
Is Big Yellow Group Plc Growing?
Over the last three years Big Yellow Group Plc has grown its earnings per share (EPS) by an average of 5.0% per year (using a line of best fit). It achieved revenue growth of 6.9% over the last year.
I'm not particularly impressed by the revenue growth, but I'm happy with the modest EPS growth. So there are some positives here, but not enough to earn high praise. You might want to check this free visual report on analyst forecasts for future earnings.
Has Big Yellow Group Plc Been A Good Investment?
Boasting a total shareholder return of 36% over three years, Big Yellow Group Plc has done well by shareholders. 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.
We compared the total CEO remuneration paid by Big Yellow Group 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. So, considering these tasty returns, the CEO compensation may be quite appropriate. Shareholders may want to check for free if Big Yellow Group insiders are buying or selling shares.
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.
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If you spot an error that warrants correction, please contact the editor at email@example.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.