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Is The Weir Group PLC's (LON:WEIR) CEO Pay Justified?

Simply Wall St

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Jon Stanton has been the CEO of The Weir Group PLC (LON:WEIR) since 2016. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Weir Group

How Does Jon Stanton's Compensation Compare With Similar Sized Companies?

Our data indicates that The Weir Group PLC is worth UK£3.8b, and total annual CEO compensation is UK£2.3m. (This number is for the twelve months until December 2018). We think total compensation is more important but we note that the CEO salary is lower, at UK£664k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of UK£1.6b to UK£5.1b. The median total CEO compensation was UK£1.9m.

That means Jon Stanton receives fairly typical remuneration for the CEO of a company that size. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

The graphic below shows how CEO compensation at Weir Group has changed from year to year.

LSE:WEIR CEO Compensation, July 18th 2019

Is The Weir Group PLC Growing?

On average over the last three years, The Weir Group PLC has grown earnings per share (EPS) by 92% each year (using a line of best fit). It achieved revenue growth of 23% over the last year.

This demonstrates that the company has been improving recently. A good result. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Shareholders might be interested in this free visualization of analyst forecasts.

Has The Weir Group PLC Been A Good Investment?

The Weir Group PLC has generated a total shareholder return of 5.8% over three years, so most shareholders wouldn't be too disappointed. 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.

In Summary...

Jon Stanton is paid around what is normal the leaders of comparable size companies.

The company is growing EPS but shareholder returns have been sound but not amazing. So upon reflection one could argue that the CEO pay is quite reasonable. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Weir Group (free visualization of insider trades).

If you want to buy a stock that is better than Weir Group, this free list of high return, low debt companies is a great place to look.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.