In 2014 Brian Cassin was appointed CEO of Experian plc (LON:EXPN). This analysis aims first to contrast CEO compensation with other large companies. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Brian Cassin's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Experian plc has a market cap of UK£23b, and is paying total annual CEO compensation of US$10m. (This figure is for the year to March 2019). That's a notable increase of 62% on last year. We think total compensation is more important but we note that the CEO salary is lower, at US$944k. When we examined a group of companies with market caps over UK£6.6b, we found that their median CEO total compensation was UK£3.9m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.
As you can see, Brian Cassin is paid more than the median CEO pay at large companies, in the same market. However, this does not necessarily mean Experian plc is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at Experian has changed from year to year.
Is Experian plc Growing?
Over the last three years Experian plc has grown its earnings per share (EPS) by an average of 1.6% per year (using a line of best fit). It achieved revenue growth of 6.0% over the last year.
I'm not particularly impressed by the revenue growth, but it is good to see modest EPS growth. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Shareholders might be interested in this free visualization of analyst forecasts.
Has Experian plc Been A Good Investment?
Most shareholders would probably be pleased with Experian plc for providing a total return of 83% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We compared total CEO remuneration at Experian plc with the amount paid at other large companies. As discussed above, we discovered that the company pays more than the median of that group.
While we generally prefer to see stronger EPS growth, there's no arguing with the strong returns to shareholders, over the last three years. Considering this fine result for investors, we daresay the CEO compensation might be apt. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Experian (free visualization of insider trades).
Important note: Experian may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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