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Is LondonMetric Property Plc's (LON:LMP) CEO Being Overpaid?

Simply Wall St

In 2013 Andrew Jones was appointed CEO of LondonMetric Property Plc (LON:LMP). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for LondonMetric Property

How Does Andrew Jones's Compensation Compare With Similar Sized Companies?

According to our data, LondonMetric Property Plc has a market capitalization of UK£1.7b, and pays its CEO total annual compensation worth UK£2.6m. (This figure is for the year to March 2019). That's a fairly small increase of 7.1% on year before. While we always look at total compensation first, we note that the salary component is less, at UK£533k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of UK£807m to UK£2.6b. The median total CEO compensation was UK£1.3m.

Thus we can conclude that Andrew Jones receives more in total compensation than the median of a group of companies in the same market, and of similar size to LondonMetric Property Plc. However, this doesn't necessarily mean the pay is too high. 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 LondonMetric Property has changed over time.

LSE:LMP CEO Compensation, July 27th 2019

Is LondonMetric Property Plc Growing?

Over the last three years LondonMetric Property Plc has grown its earnings per share (EPS) by an average of 40% per year (using a line of best fit). In the last year, its revenue is up 3.4%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. It could be important to check this free visual depiction of what analysts expect for the future.

Has LondonMetric Property Plc Been A Good Investment?

Boasting a total shareholder return of 46% over three years, LondonMetric Property Plc has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

We examined the amount LondonMetric Property Plc pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

Importantly, though, the company has impressed with its earnings per share growth, 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. Whatever your view on compensation, you might want to check if insiders are buying or selling LondonMetric Property shares (free trial).

Important note: LondonMetric Property 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.

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.

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. Thank you for reading.