Chris Loughlin became the CEO of Pennon Group Plc (LON:PNN) in 2016. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Chris Loughlin’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Pennon Group Plc has a market cap of UK£3.2b, and is paying total annual CEO compensation of UK£1m. That’s less than last year. We looked at a group of companies with market capitalizations from UK£1.6b to UK£5.0b, and the median CEO compensation was UK£2m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. Though positive, it’s important we delve into the performance of the actual business.
The graphic below shows how CEO compensation at Pennon Group has changed from year to year.
Is Pennon Group Plc Growing?
Over the last three years Pennon Group Plc has grown its earnings per share (EPS) by an average of 15% per year. It achieved revenue growth of 3.1% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s nice to see a little revenue growth, as this is consistent with healthy business conditions.
You might want to check this free visual report on analyst forecasts for future earnings.
Has Pennon Group Plc Been A Good Investment?
Pennon Group Plc has not done too badly by shareholders, with a total return of 4.3%, over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
Pennon Group Plc is currently paying its CEO below what is normal for companies of its size. Considering the underlying business is growing earnings, this would suggest the pay is modest. While returns over the last few years haven’t been top notch, there is nothing to suggest to us that Chris Loughlin is overcompensated.
It’s great to see a company that pays its CEO reasonably, even while growing. But it would be nice if insiders were also buying shares. So you may want to check if insiders are buying Pennon Group Plc shares with their own money (free access).
Or you might prefer this data-rich interactive visualization of historic revenue and earnings.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.