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Liv Garfield became the CEO of Severn Trent Plc (LON:SVT) in 2014. First, this article will compare CEO compensation with compensation at similar sized 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 Liv Garfield's Compensation Compare With Similar Sized Companies?
Our data indicates that Severn Trent Plc is worth UK£4.7b, and total annual CEO compensation is UK£2.1m. (This is based on the year to March 2018). While we always look at total compensation first, we note that the salary component is less, at UK£687k. We examined companies with market caps from UK£3.1b to UK£9.2b, and discovered that the median CEO total compensation of that group was UK£2.5m.
So Liv Garfield is paid around the average of 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 Severn Trent has changed over time.
Is Severn Trent Plc Growing?
Earnings per share at Severn Trent Plc are much the same as they were three years ago, albeit with a positive trend. It achieved revenue growth of 4.4% over the last year.
I'm not particularly impressed by the revenue growth, 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 Severn Trent Plc Been A Good Investment?
With a total shareholder return of 0.2% over three years, Severn Trent Plc has done okay by shareholders. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
Remuneration for Liv Garfield is close enough to the median pay for a CEO of a similar sized company .
The company isn't showing particularly great growth, and shareholder turns haven't been particularly inspiring in the last few years. 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 Severn Trent shares (free trial).
Important note: Severn Trent 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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