Is Driver Group plc (LON:DRV) Excessively Paying Its CEO?
Gordon Wilkinson has been the CEO of Driver Group plc (LON:DRV) since 2016. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
See our latest analysis for Driver Group
How Does Gordon Wilkinson's Compensation Compare With Similar Sized Companies?
According to our data, Driver Group plc has a market capitalization of UK£32m, and pays its CEO total annual compensation worth UK£702k. (This number is for the twelve months until September 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at UK£425k. We took a group of companies with market capitalizations below UK£153m, and calculated the median CEO total compensation to be UK£239k.
Thus we can conclude that Gordon Wilkinson receives more in total compensation than the median of a group of companies in the same market, and of similar size to Driver Group plc. However, this doesn't necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Driver Group has changed over time.
Is Driver Group plc Growing?
On average over the last three years, Driver Group plc has grown earnings per share (EPS) by 93% each year (using a line of best fit). Its revenue is up 4.0% over last year.
This demonstrates that the company has been improving recently. A good result. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. It could be important to check this free visual depiction of what analysts expect for the future.
Has Driver Group plc Been A Good Investment?
With a three year total loss of 7.7%, Driver Group plc would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
In Summary...
We compared the total CEO remuneration paid by Driver Group plc, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. Considering the per share profit growth, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Driver Group.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
