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Gavin Rochussen became the CEO of Polar Capital Holdings plc (LON:POLR) in 2017, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Polar Capital Holdings.
How Does Total Compensation For Gavin Rochussen Compare With Other Companies In The Industry?
Our data indicates that Polar Capital Holdings plc has a market capitalization of UK£482m, and total annual CEO compensation was reported as UK£745k for the year to March 2020. Notably, that's a decrease of 23% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at UK£350k.
In comparison with other companies in the industry with market capitalizations ranging from UK£310m to UK£1.2b, the reported median CEO total compensation was UK£759k. So it looks like Polar Capital Holdings compensates Gavin Rochussen in line with the median for the industry. Moreover, Gavin Rochussen also holds UK£7.2m worth of Polar Capital Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
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. There isn't a significant difference between Polar Capital Holdings and the broader market, in terms of salary allocation in the overall compensation package. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Polar Capital Holdings plc's Growth
Polar Capital Holdings plc's earnings per share (EPS) grew 35% per year over the last three years. It saw its revenue drop 14% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Polar Capital Holdings plc Been A Good Investment?
Polar Capital Holdings plc has generated a total shareholder return of 31% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
As we touched on above, Polar Capital Holdings plc is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, it's admirable that over the last three years, EPS growth for the company has been impressive, though the same can't be said for investor returns. As a result of these considerations, we would suggest the compensation is reasonable, but looking ahead shareholders will likely want to see healthier returns.
If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Polar Capital Holdings.
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.
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