Andy Ransom has been the CEO of Rentokil Initial plc (LON:RTO) since 2013. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
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How Does Andy Ransom's Compensation Compare With Similar Sized Companies?
According to our data, Rentokil Initial plc has a market capitalization of UK£7.1b, and pays its CEO total annual compensation worth UK£4.4m. (This is based on the year to December 2018). That's a notable increase of 11% on last year. While we always look at total compensation first, we note that the salary component is less, at UK£750k. When we examined a selection of companies with market caps ranging from UK£3.1b to UK£9.4b, we found the median CEO total compensation was UK£2.7m.
As you can see, Andy Ransom is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Rentokil Initial plc is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at Rentokil Initial has changed over time.
Is Rentokil Initial plc Growing?
On average over the last three years, Rentokil Initial plc has grown earnings per share (EPS) by 4.3% each year (using a line of best fit). It achieved revenue growth of 2.5% over the last year.
I'd prefer higher 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 Rentokil Initial plc Been A Good Investment?
Most shareholders would probably be pleased with Rentokil Initial plc for providing a total return of 126% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
We compared the total CEO remuneration paid by Rentokil Initial plc, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
Over the last three years returns to investors have been great, though we might have liked stronger business growth. Considering this fine result for investors, we daresay the CEO compensation might be apt. Shareholders may want to check for free if Rentokil Initial insiders are buying or selling shares.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.