Does Headlam Group plc's (LON:HEAD) CEO Pay Reflect Performance?
In 2016 Steve Wilson was appointed CEO of Headlam Group plc (LON:HEAD). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. 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.
Check out our latest analysis for Headlam Group
How Does Steve Wilson's Compensation Compare With Similar Sized Companies?
Our data indicates that Headlam Group plc is worth UK£387m, and total annual CEO compensation was reported as UK£685k for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at UK£475k. When we examined a selection of companies with market caps ranging from UK£155m to UK£620m, we found the median CEO total compensation was UK£691k.
So Steve Wilson receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see, below, how CEO compensation at Headlam Group has changed over time.
Is Headlam Group plc Growing?
Headlam Group plc has increased its earnings per share (EPS) by an average of 3.1% a year, over the last three years (using a line of best fit). It achieved revenue growth of 3.4% over the last year.
I would argue that the improvement in revenue isn't particularly impressive, but the modest improvement in EPS is good. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. You might want to check this free visual report on analyst forecasts for future earnings.
Has Headlam Group plc Been A Good Investment?
With a total shareholder return of 13% over three years, Headlam Group plc shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
In Summary...
Steve Wilson is paid around the same as most CEOs of similar size companies.
We think many would like to see better growth. While there is room for improvement, we haven't seen evidence to suggest the pay is too generous. Whatever your view on compensation, you might want to check if insiders are buying or selling Headlam Group shares (free trial).
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.
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.
