Pete Redfern has been the CEO of Taylor Wimpey plc (LON:TW.) since 2007. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Pete Redfern's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Taylor Wimpey plc has a market cap of UK£4.8b, and is paying total annual CEO compensation of UK£3.2m. (This number is for the twelve months until December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at UK£852k. When we examined a selection of companies with market caps ranging from UK£3.3b to UK£9.9b, we found the median CEO total compensation was UK£2.8m.
So Pete Redfern receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
You can see, below, how CEO compensation at Taylor Wimpey has changed over time.
Is Taylor Wimpey plc Growing?
Over the last three years Taylor Wimpey plc has grown its earnings per share (EPS) by an average of 7.7% per year (using a line of best fit). In the last year, its revenue is up 3.5%.
I would argue that the improvement in revenue isn't particularly impressive, but the modest improvement in EPS is good. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. You might want to check this free visual report on analyst forecasts for future earnings.
Has Taylor Wimpey plc Been A Good Investment?
Taylor Wimpey plc has generated a total shareholder return of 23% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
Pete Redfern is paid around the same as most CEOs of similar size companies.
We see room for improved growth, as well as fairly unremarkable returns over the last three years. While there is room for improvement, we haven't seen evidence to suggest the pay is too generous. Shareholders may want to check for free if Taylor Wimpey insiders are buying or selling shares.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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