U.S. Markets open in 5 hrs 49 mins

Should You Worry About Imperial Brands PLC's (LON:IMB) CEO Pay?

Simply Wall St

Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!

In 2010 Alison Cooper was appointed CEO of Imperial Brands PLC (LON:IMB). First, this article will compare CEO compensation with compensation at other large companies. Then we'll look at a snap shot of the business growth. 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.

See our latest analysis for Imperial Brands

How Does Alison Cooper's Compensation Compare With Similar Sized Companies?

Our data indicates that Imperial Brands PLC is worth UK£23b, and total annual CEO compensation is UK£3.9m. (This is based on the year to September 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at UK£1.1m. We looked at a group of companies with market capitalizations over UK£6.1b and the median CEO total compensation was UK£3.9m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts - even though some are quite a bit bigger than others).

So Alison Cooper receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

You can see a visual representation of the CEO compensation at Imperial Brands, below.

LSE:IMB CEO Compensation, May 2nd 2019

Is Imperial Brands PLC Growing?

On average over the last three years, Imperial Brands PLC has grown earnings per share (EPS) by 2.1% each year (using a line of best fit). Revenue was pretty flat on last year.

I would argue that the improvement in revenue isn't particularly impressive, but it is good to see modest EPS growth. 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 Imperial Brands PLC Been A Good Investment?

Given the total loss of 23% over three years, many shareholders in Imperial Brands PLC are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Remuneration for Alison Cooper is close enough to the median pay for a CEO of a large company .

The per share growth could be better, in our view. And it's hard to argue that the returns over the last three years have delighted. So it would take a bold person to suggest the pay is too modest. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Imperial Brands (free visualization of insider trades).

If you want to buy a stock that is better than Imperial Brands, 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.