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Jolyon Harrison became the CEO of MJ Gleeson plc (LON:GLE) in 2012. First, this article will compare CEO compensation with compensation at similar sized companies. 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 process should give us an idea about how appropriately the CEO is paid.
How Does Jolyon Harrison's Compensation Compare With Similar Sized Companies?
According to our data, MJ Gleeson plc has a market capitalization of UK£477m, and pays its CEO total annual compensation worth UK£2.9m. (This figure is for the year to June 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at UK£480k. We looked at a group of companies with market capitalizations from UK£316m to UK£1.3b, and the median CEO total compensation was UK£892k.
It would therefore appear that MJ Gleeson plc pays Jolyon Harrison 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 get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at MJ Gleeson has changed from year to year.
Is MJ Gleeson plc Growing?
MJ Gleeson plc has increased its earnings per share (EPS) by an average of 19% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 36%.
This shows that the company has improved itself over the last few years. Good news for shareholders. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. You might want to check this free visual report on analyst forecasts for future earnings.
Has MJ Gleeson plc Been A Good Investment?
I think that the total shareholder return of 76%, over three years, would leave most MJ Gleeson plc shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We compared total CEO remuneration at MJ Gleeson plc with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.
However we must not forget that the EPS growth has been very strong over three years. On top of that, in the same period, returns to shareholders have been great. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. Shareholders may want to check for free if MJ Gleeson insiders are buying or selling shares.
Important note: MJ Gleeson 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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If you spot an error that warrants correction, please contact the editor at email@example.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.