Does QinetiQ Group's (LON:QQ.) CEO Salary Compare Well With Industry Peers?
Steve Wadey has been the CEO of QinetiQ Group plc (LON:QQ.) since 2015, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Check out our latest analysis for QinetiQ Group
How Does Total Compensation For Steve Wadey Compare With Other Companies In The Industry?
Our data indicates that QinetiQ Group plc has a market capitalization of UK£1.7b, and total annual CEO compensation was reported as UK£2.0m for the year to March 2020. That's a notable decrease of 15% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at UK£610k.
On comparing similar companies from the same industry with market caps ranging from UK£762m to UK£2.4b, we found that the median CEO total compensation was UK£1.2m. This suggests that Steve Wadey is paid more than the median for the industry. Furthermore, Steve Wadey directly owns UK£1.6m worth of shares in the company.
Component | 2020 | 2019 | Proportion (2020) |
Salary | UK£610k | UK£596k | 31% |
Other | UK£1.4m | UK£1.7m | 69% |
Total Compensation | UK£2.0m | UK£2.3m | 100% |
On an industry level, roughly 42% of total compensation represents salary and 58% is other remuneration. It's interesting to note that QinetiQ Group allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
QinetiQ Group plc's Growth
Over the last three years, QinetiQ Group plc has shrunk its earnings per share by 4.4% per year. Its revenue is up 18% over the last year.
Investors would be a bit wary of companies that have lower EPS On the other hand, the strong revenue growth suggests the business is growing. It's hard to reach a conclusion about business performance right now. This may be one to watch. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has QinetiQ Group plc Been A Good Investment?
Most shareholders would probably be pleased with QinetiQ Group plc for providing a total return of 35% over three years. 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.
To Conclude...
As previously discussed, Steve is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Still, shareholder returns over the last three years,and recent revenue growth have been trending northwards. Sadly, EPS growth did not follow suit, remaining during this time. Considering all the factors, we would have to say CEO pay is fair; however, moving forward, it would be nice to see EPS growth from the company as well.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 2 warning signs for QinetiQ Group that investors should look into moving forward.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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