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This article will reflect on the compensation paid to Jeremy Michael Lewis who has served as CEO of Universe Group plc (LON:UNG) since 2013. This analysis will also assess whether Universe Group pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
How Does Total Compensation For Jeremy Michael Lewis Compare With Other Companies In The Industry?
At the time of writing, our data shows that Universe Group plc has a market capitalization of UK£16m, and reported total annual CEO compensation of UK£289k for the year to December 2019. Notably, that's an increase of 11% over the year before. Notably, the salary which is UK£227.0k, represents most of the total compensation being paid.
In comparison with other companies in the industry with market capitalizations under UK£153m, the reported median total CEO compensation was UK£243k. From this we gather that Jeremy Michael Lewis is paid around the median for CEOs in the industry.
On an industry level, around 65% of total compensation represents salary and 35% is other remuneration. Universe Group pays out 79% of remuneration in the form of a salary, significantly higher than the industry average. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
A Look at Universe Group plc's Growth Numbers
Universe Group plc has reduced its earnings per share by 73% a year over the last three years. In the last year, its revenue is up 13%.
Few shareholders would be pleased to read that earnings have declined. While the revenue growth is good to see, it is outweighed by the fact that earnings are down, over three years. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Universe Group plc Been A Good Investment?
With a three year total loss of 41% for the shareholders, Universe Group plc would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.
As previously discussed, Jeremy Michael is compensated close to the median for companies of its size, and which belong to the same industry. On the other hand, earnings growth and total shareholder return have been negative for the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.
CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 3 warning signs for Universe Group (of which 1 is a bit unpleasant!) that you should know about in order to have a holistic understanding of the stock.
Important note: Universe Group is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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.
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