Gordon Wilkinson became the CEO of Driver Group plc (LON:DRV) in 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Gordon Wilkinson's Compensation Compare With Similar Sized Companies?
Our data indicates that Driver Group plc is worth UK£26m, and total annual CEO compensation was reported as UK£702k for the year to September 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at UK£425k. We looked at a group of companies with market capitalizations under UK£163m, and the median CEO total compensation was UK£252k.
It would therefore appear that Driver Group plc pays Gordon Wilkinson more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at Driver Group has changed from year to year.
Is Driver Group plc Growing?
Driver Group plc has increased its earnings per share (EPS) by an average of 102% a year, over the last three years (using a line of best fit). The trailing twelve months of revenue was pretty much the same as the prior period.
This demonstrates that the company has been improving recently. A good result. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Shareholders might be interested in this free visualization of analyst forecasts.
Has Driver Group plc Been A Good Investment?
With a total shareholder return of 8.4% over three years, Driver Group plc has done okay by shareholders. But they would probably prefer not to see CEO compensation far in excess of the median.
We compared the total CEO remuneration paid by Driver Group plc, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. We also note that, over the same time frame, shareholder returns haven't been bad. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn't call the CEO pay problematic. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Driver Group.
If you want to buy a stock that is better than Driver Group, this free list of high return, low debt companies is a great place to look.
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