Shareholders May Be Wary Of Increasing Jersey Electricity plc's (LON:JEL) CEO Compensation Package
Key Insights
Jersey Electricity's Annual General Meeting to take place on 5th of March
CEO Chris Ambler's total compensation includes salary of UK£298.5k
Total compensation is 307% above industry average
Jersey Electricity's three-year loss to shareholders was 3.1% while its EPS was down 1.0% over the past three years
Shareholders will probably not be too impressed with the underwhelming results at Jersey Electricity plc (LON:JEL) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 5th of March. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. From our analysis, we think CEO compensation may need a review in light of the recent performance.
Check out our latest analysis for Jersey Electricity
How Does Total Compensation For Chris Ambler Compare With Other Companies In The Industry?
According to our data, Jersey Electricity plc has a market capitalization of UK£138m, and paid its CEO total annual compensation worth UK£464k over the year to September 2023. That's a notable increase of 9.2% on last year. We note that the salary portion, which stands at UK£298.5k constitutes the majority of total compensation received by the CEO.
On comparing similar companies from the the United Kingdom Electric Utilities industry with market caps ranging from UK£79m to UK£315m, we found that the median CEO total compensation was UK£114k. Hence, we can conclude that Chris Ambler is remunerated higher than the industry median.
Component | 2023 | 2022 | Proportion (2023) |
Salary | UK£299k | UK£264k | 64% |
Other | UK£166k | UK£161k | 36% |
Total Compensation | UK£464k | UK£425k | 100% |
Speaking on an industry level, nearly 64% of total compensation represents salary, while the remainder of 36% is other remuneration. Our data reveals that Jersey Electricity allocates salary more or less in line with the wider market. 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.
Jersey Electricity plc's Growth
Earnings per share at Jersey Electricity plc are much the same as they were three years ago, albeit slightly lower. It achieved revenue growth of 6.5% over the last year.
Its a bit disappointing to see that the company has failed to grow its EPS. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Jersey Electricity plc Been A Good Investment?
Since shareholders would have lost about 3.1% over three years, some Jersey Electricity plc investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 2 warning signs for Jersey Electricity (of which 1 is potentially serious!) that you should know about in order to have a holistic understanding of the stock.
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.
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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.
