Is John Wood Group PLC's (LON:WG.) CEO Being Overpaid?
Robin Watson has been the CEO of John Wood Group PLC (LON:WG.) since 2016. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
View our latest analysis for John Wood Group
How Does Robin Watson's Compensation Compare With Similar Sized Companies?
Our data indicates that John Wood Group PLC is worth UK£2.2b, and total annual CEO compensation was reported as US$1.9m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$690k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. 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£1.8m.
That means Robin Watson receives fairly typical remuneration for the CEO of a company that size. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
You can see, below, how CEO compensation at John Wood Group has changed over time.
Is John Wood Group PLC Growing?
Over the last three years, John Wood Group PLC has not seen its earnings per share change much, though there is a positive trend. It achieved revenue growth of 18% over the last year.
I think the revenue growth is good. And, while modest, the earnings per share growth is noticeable. Although we'll stop short of calling the stock a top performer, we think the company has potential. It could be important to check this free visual depiction of what analysts expect for the future.
Has John Wood Group PLC Been A Good Investment?
Since shareholders would have lost about 56% over three years, some John Wood Group PLC shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
In Summary...
Remuneration for Robin Watson is close enough to the median pay for a CEO of a similar sized company .
The per share growth could be better, in our view. And we think the shareholder returns - over three years - have been underwhelming. So many would argue that the CEO is certainly not underpaid. Whatever your view on compensation, you might want to check if insiders are buying or selling John Wood Group shares (free trial).
Important note: John Wood Group 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.
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