In 2017 Philip Littlewood was appointed CEO of Stride Stapled Group (NZSE:SPG). First, this article will compare CEO compensation with compensation at similar sized companies. 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 Philip Littlewood's Compensation Compare With Similar Sized Companies?
According to our data, Stride Stapled Group has a market capitalization of NZ$826m, and paid its CEO total annual compensation worth NZ$1.0m over the year to March 2019. We think total compensation is more important but we note that the CEO salary is lower, at NZ$600k. We examined companies with market caps from NZ$303m to NZ$1.2b, and discovered that the median CEO total compensation of that group was NZ$984k.
That means Philip Littlewood receives fairly typical remuneration for the CEO of a company that size. 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.
The graphic below shows how CEO compensation at Stride Stapled Group has changed from year to year.
Is Stride Stapled Group Growing?
Over the last three years Stride Stapled Group has grown its earnings per share (EPS) by an average of 7.1% per year (using a line of best fit). Its revenue is down 1.1% over last year.
I would prefer it if there was revenue growth, but I'm happy with the EPS growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. It could be important to check this free visual depiction of what analysts expect for the future.
Has Stride Stapled Group Been A Good Investment?
I think that the total shareholder return of 57%, over three years, would leave most Stride Stapled Group shareholders smiling. 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.
Philip Littlewood is paid around the same as most CEOs of similar size companies.
While the growth could be better, the shareholder returns are clearly good. So all things considered I'd venture that the CEO pay is appropriate. Shareholders may want to check for free if Stride Stapled Group insiders are buying or selling shares.
Important note: Stride Stapled Group 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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