Andrew Croft became the CEO of St. James's Place plc (LON:STJ) in 2018, 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 St. James's Place.
Comparing St. James's Place plc's CEO Compensation With the industry
At the time of writing, our data shows that St. James's Place plc has a market capitalization of UK£5.1b, and reported total annual CEO compensation of UK£1.6m for the year to December 2019. That's a notable decrease of 18% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at UK£549k.
On comparing similar companies from the same industry with market caps ranging from UK£3.0b to UK£9.1b, we found that the median CEO total compensation was UK£4.0m. This suggests that Andrew Croft is paid below the industry median. Moreover, Andrew Croft also holds UK£6.9m worth of St. James's Place stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, roughly 49% of total compensation represents salary and 51% is other remuneration. St. James's Place sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
St. James's Place plc's Growth
St. James's Place plc has seen its earnings per share (EPS) increase by 29% a year over the past three years. In the last year, its revenue is down 87%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 St. James's Place plc Been A Good Investment?
Given the total shareholder loss of 5.8% over three years, many shareholders in St. James's Place plc are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.
As we noted earlier, St. James's Place pays its CEO lower than the norm for similar-sized companies belonging to the same industry. Importantly though, the company has impressed with its EPS growth over three years. It's tough to criticize CEO compensation when the per-share EPS movement is positive. But we believe shareholders would want to see healthier returns before the CEO gets a raise.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 2 warning signs for St. James's Place that investors should be aware of in a dynamic business environment.
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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