It's Probably Less Likely That J D Wetherspoon plc's (LON:JDW) CEO Will See A Huge Pay Rise This Year
Key Insights
J D Wetherspoon's Annual General Meeting to take place on 16th of November
Salary of UK£638.0k is part of CEO John Hutson's total remuneration
The overall pay is comparable to the industry average
J D Wetherspoon's three-year loss to shareholders was 34% while its EPS grew by 88% over the past three years
The underwhelming share price performance of J D Wetherspoon plc (LON:JDW) in the past three years would have disappointed many shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 16th of November. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.
See our latest analysis for J D Wetherspoon
Comparing J D Wetherspoon plc's CEO Compensation With The Industry
At the time of writing, our data shows that J D Wetherspoon plc has a market capitalization of UK£850m, and reported total annual CEO compensation of UK£1.1m for the year to July 2023. That's a fairly small increase of 5.4% over the previous year. Notably, the salary which is UK£638.0k, represents a considerable chunk of the total compensation being paid.
In comparison with other companies in the British Hospitality industry with market capitalizations ranging from UK£326m to UK£1.3b, the reported median CEO total compensation was UK£871k. So it looks like J D Wetherspoon compensates John Hutson in line with the median for the industry. Moreover, John Hutson also holds UK£1.4m worth of J D Wetherspoon stock directly under their own name.
Component | 2023 | 2022 | Proportion (2023) |
Salary | UK£638k | UK£638k | 60% |
Other | UK£434k | UK£379k | 40% |
Total Compensation | UK£1.1m | UK£1.0m | 100% |
Talking in terms of the industry, salary represented approximately 58% of total compensation out of all the companies we analyzed, while other remuneration made up 42% of the pie. Although there is a difference in how total compensation is set, J D Wetherspoon more or less reflects the market in terms of setting the salary. 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 J D Wetherspoon plc's Growth Numbers
J D Wetherspoon plc's earnings per share (EPS) grew 88% per year over the last three years. In the last year, its revenue is up 11%.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing 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 J D Wetherspoon plc Been A Good Investment?
Few J D Wetherspoon plc shareholders would feel satisfied with the return of -34% over three years. So shareholders would probably want the company to be less generous with CEO compensation.
To Conclude...
Shareholders have not seen their shares grow in value, rather they have seen their shares decline. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 2 warning signs for J D Wetherspoon you should be aware of, and 1 of them is a bit unpleasant.
Switching gears from J D Wetherspoon, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
