This article will reflect on the compensation paid to John Ions who has served as CEO of Liontrust Asset Management PLC (LON:LIO) since 2010. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
How Does Total Compensation For John Ions Compare With Other Companies In The Industry?
According to our data, Liontrust Asset Management PLC has a market capitalization of UK£763m, and paid its CEO total annual compensation worth UK£4.6m over the year to March 2020. That's a fairly small increase of 3.1% over the previous year. We think total compensation is more important but our data shows that the CEO salary is lower, at UK£348k.
On examining similar-sized companies in the industry with market capitalizations between UK£304m and UK£1.2b, we discovered that the median CEO total compensation of that group was UK£759k. Accordingly, our analysis reveals that Liontrust Asset Management PLC pays John Ions north of the industry median. Furthermore, John Ions directly owns UK£9.6m worth of shares in the company, implying that they are deeply invested in the company's success.
Talking in terms of the industry, salary represented approximately 49% of total compensation out of all the companies we analyzed, while other remuneration made up 51% of the pie. Liontrust Asset Management pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Liontrust Asset Management PLC's Growth Numbers
Liontrust Asset Management PLC has seen its earnings per share (EPS) increase by 18% a year over the past three years. In the last year, its revenue is up 27%.
Shareholders would be glad to know that the company has improved itself over the last few years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Liontrust Asset Management PLC Been A Good Investment?
We think that the total shareholder return of 188%, over three years, would leave most Liontrust Asset Management PLC shareholders smiling. 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.
As previously discussed, John is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Importantly though, EPS growth and shareholder returns are very impressive over the last three years. As a result of the excellent all-round performance of the company, we believe CEO compensation is fair. The pleasing shareholder returns are the cherry on top. We wouldn't be wrong in saying that shareholders feel that John's performance creates value for the company.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 5 warning signs for Liontrust Asset Management that investors should think about before committing capital to this stock.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email email@example.com.