Shareholders May Be More Conservative With SSE plc's (LON:SSE) CEO Compensation For Now
CEO Alistair Phillips-Davies has done a decent job of delivering relatively good performance at SSE plc (LON:SSE) recently. As shareholders go into the upcoming AGM on 22 July 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders will still be cautious of paying the CEO excessively.
Check out our latest analysis for SSE
How Does Total Compensation For Alistair Phillips-Davies Compare With Other Companies In The Industry?
According to our data, SSE plc has a market capitalization of UK£16b, and paid its CEO total annual compensation worth UK£3.0m over the year to March 2021. That's a notable increase of 27% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at UK£915k.
In comparison with other companies in the industry with market capitalizations over UK£5.8b , the reported median total CEO compensation was UK£1.9m. Accordingly, our analysis reveals that SSE plc pays Alistair Phillips-Davies north of the industry median. Furthermore, Alistair Phillips-Davies directly owns UK£4.4m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2021 | 2020 | Proportion (2021) |
Salary | UK£915k | UK£890k | 30% |
Other | UK£2.1m | UK£1.5m | 70% |
Total Compensation | UK£3.0m | UK£2.4m | 100% |
Talking in terms of the industry, salary represented approximately 54% of total compensation out of all the companies we analyzed, while other remuneration made up 46% of the pie. SSE pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at SSE plc's Growth Numbers
SSE plc's earnings per share (EPS) grew 49% per year over the last three years. Revenue was pretty flat on last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has SSE plc Been A Good Investment?
Boasting a total shareholder return of 38% over three years, SSE plc has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary...
The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.
CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 4 warning signs for SSE you should be aware of, and 2 of them are significant.
Important note: SSE 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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