Should You Worry About Intertek Group plc's (LON:ITRK) CEO Pay Cheque?
André Pierre Lacroix has been the CEO of Intertek Group plc (LON:ITRK) since 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. 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.
Check out our latest analysis for Intertek Group
How Does André Pierre Lacroix's Compensation Compare With Similar Sized Companies?
Our data indicates that Intertek Group plc is worth UK£8.7b, and total annual CEO compensation was reported as UK£6.2m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at UK£945k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We looked at a group of companies with market capitalizations over UK£6.2b and the median CEO total compensation was UK£3.9m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.
As you can see, André Pierre Lacroix is paid more than the median CEO pay at large companies, in the same market. However, this does not necessarily mean Intertek Group plc is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see a visual representation of the CEO compensation at Intertek Group, below.
Is Intertek Group plc Growing?
Over the last three years Intertek Group plc has grown its earnings per share (EPS) by an average of 47% per year (using a line of best fit). In the last year, its revenue is up 5.5%.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Shareholders might be interested in this free visualization of analyst forecasts.
Has Intertek Group plc Been A Good Investment?
Boasting a total shareholder return of 79% over three years, Intertek Group plc has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
We examined the amount Intertek Group plc pays its CEO, and compared it to the amount paid by other large 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. Even better, returns to shareholders have been plentiful, over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Intertek Group.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
