U.S. Markets closed

Is Great Portland Estates Plc's (LON:GPOR) CEO Pay Justified?

Simply Wall St

Toby Courtauld became the CEO of Great Portland Estates Plc (LON:GPOR) in 2002. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. 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.

Check out our latest analysis for Great Portland Estates

How Does Toby Courtauld's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Great Portland Estates Plc has a market cap of UK£2.3b, and reported total annual CEO compensation of UK£905k for the year to March 2019. We think total compensation is more important but we note that the CEO salary is lower, at UK£588k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of UK£1.5b to UK£4.9b. The median total CEO compensation was UK£1.7m.

Most shareholders would consider it a positive that Toby Courtauld takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.

You can see a visual representation of the CEO compensation at Great Portland Estates, below.

LSE:GPOR CEO Compensation, January 16th 2020

Is Great Portland Estates Plc Growing?

On average over the last three years, Great Portland Estates Plc has grown earnings per share (EPS) by 50% each year (using a line of best fit). Its revenue is down 70% over last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Shareholders might be interested in this free visualization of analyst forecasts.

Has Great Portland Estates Plc Been A Good Investment?

Most shareholders would probably be pleased with Great Portland Estates Plc for providing a total return of 48% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

It looks like Great Portland Estates Plc pays its CEO less than similar sized companies.

Since the business is growing, many would argue this suggests the pay is modest. The strong history of shareholder returns might even have some thinking that Toby Courtauld deserves a raise! Most shareholders like to see a modestly paid CEO combined with strong performance by the company. The cherry on top would be if company insiders are buying shares with their own money. Shareholders may want to check for free if Great Portland Estates insiders are buying or selling shares.

Important note: Great Portland Estates 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.

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.