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Does QinetiQ Group plc's (LON:QQ.) CEO Pay Reflect Performance?

Simply Wall St

Steve Wadey has been the CEO of QinetiQ Group plc (LON:QQ.) since 2015. First, this article will compare CEO compensation with compensation at similar sized companies. 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 method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for QinetiQ Group

How Does Steve Wadey's Compensation Compare With Similar Sized Companies?

According to our data, QinetiQ Group plc has a market capitalization of UK£2.0b, and paid its CEO total annual compensation worth UK£2.3m over the year to March 2019. While we always look at total compensation first, we note that the salary component is less, at UK£596k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We looked at a group of companies with market capitalizations from UK£1.5b to UK£4.9b, and the median CEO total compensation was UK£1.7m.

It would therefore appear that QinetiQ Group plc pays Steve Wadey 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. We can better assess whether the pay is overly generous by looking into the underlying business performance.

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

LSE:QQ. CEO Compensation, December 23rd 2019

Is QinetiQ Group plc Growing?

Over the last three years, QinetiQ Group plc has not seen its earnings per share change much, though there is a positive trend. It achieved revenue growth of 14% over the last year.

This revenue growth could really point to a brighter future. And, while modest, the earnings per share growth is noticeable. So while performance isn't amazing, we think it really does seem quite respectable. You might want to check this free visual report on analyst forecasts for future earnings.

Has QinetiQ Group plc Been A Good Investment?

Boasting a total shareholder return of 50% over three years, QinetiQ Group plc has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

We examined the amount QinetiQ Group plc pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

Over the last three years returns to investors have been great, though we might have liked stronger business growth. Considering this fine result for investors, we daresay the CEO compensation might be apt. Whatever your view on compensation, you might want to check if insiders are buying or selling QinetiQ Group shares (free trial).

If you want to buy a stock that is better than QinetiQ Group, this free list of high return, low debt companies is a great place to look.

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.