In 2000 Tim Steiner was appointed CEO of Ocado Group plc (LON:OCDO). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Tim Steiner's Compensation Compare With Similar Sized Companies?
Our data indicates that Ocado Group plc is worth UK£9.3b, and total annual CEO compensation was reported as UK£3.1m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at UK£606k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We took a group of companies with market capitalizations over UK£6.1b, and calculated the median CEO total compensation to be UK£3.4m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
That means Tim Steiner receives fairly typical remuneration for the CEO of a large company. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
You can see, below, how CEO compensation at Ocado Group has changed over time.
Is Ocado Group plc Growing?
Ocado Group plc has reduced its earnings per share by an average of 125% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is up 9.8%.
Unfortunately, earnings per share have trended lower over the last three years. The fairly low revenue growth fails to impress given that the earnings per share is down. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.
Has Ocado Group plc Been A Good Investment?
Boasting a total shareholder return of 410% over three years, Ocado Group 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.
Remuneration for Tim Steiner is close enough to the median pay for a CEO of a large company .
We feel that earnings per share have been a bit disappointing, but it's nice to see positive shareholder returns over the last three years. So we think most shareholders wouldn't be too worried about CEO compensation, which is close to the median for large companies. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Ocado Group (free visualization of insider trades).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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.
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