Jonathan Murphy became the CEO of Assura Plc (LON:AGR) in 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Jonathan Murphy's Compensation Compare With Similar Sized Companies?
Our data indicates that Assura Plc is worth UK£1.8b, and total annual CEO compensation was reported as UK£760k for the year to March 2019. While we always look at total compensation first, we note that the salary component is less, at UK£365k. We examined companies with market caps from UK£767m to UK£2.5b, and discovered that the median CEO total compensation of that group was UK£1.4m.
A first glance this seems like a real positive for shareholders, since Jonathan Murphy is paid less than the average total compensation paid by similar sized companies. However, before we heap on the praise, we should delve deeper to understand business performance.
The graphic below shows how CEO compensation at Assura has changed from year to year.
Is Assura Plc Growing?
On average over the last three years, Assura Plc has shrunk earnings per share by 17% each year (measured with a line of best fit). In the last year, its revenue is up 12%.
Unfortunately, earnings per share have trended lower over the last three years. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.
Has Assura Plc Been A Good Investment?
Most shareholders would probably be pleased with Assura Plc for providing a total return of 52% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
It looks like Assura Plc pays its CEO less than similar sized companies.
Jonathan Murphy is paid less than CEOs of similar size companies. While the company isn't growing on our analysis, shareholder returns have been good in recent years. Although we could see higher EPS growth, we'd argue the remuneration is not an issue, based on these observations. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Assura.
Important note: Assura may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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