Should You Worry About Vertu Motors plc's (LON:VTU) CEO Salary Level?
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Robert Forrester is the CEO of Vertu Motors plc (LON:VTU). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for Vertu Motors
How Does Robert Forrester's Compensation Compare With Similar Sized Companies?
According to our data, Vertu Motors plc has a market capitalization of UK£147m, and pays its CEO total annual compensation worth UK£616k. (This is based on the year to February 2019). While we always look at total compensation first, we note that the salary component is less, at UK£315k. We examined companies with market caps from UK£79m to UK£315m, and discovered that the median CEO total compensation of that group was UK£538k.
So Robert Forrester is paid around the average of the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
The graphic below shows how CEO compensation at Vertu Motors has changed from year to year.
Is Vertu Motors plc Growing?
Over the last three years Vertu Motors plc has shrunk its earnings per share by an average of 5.2% per year (measured with a line of best fit). Its revenue is up 6.7% over last year.
Sadly for shareholders, earnings per share are actually down, over three years. The fairly low revenue growth fails to impress given that the earnings per share is down. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has Vertu Motors plc Been A Good Investment?
Given the total loss of 8.8% over three years, many shareholders in Vertu Motors 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 Robert Forrester is close enough to the median pay for a CEO of a similar sized company .
Returns have been disappointing and the company is not growing its earnings per share. Most would consider it prudent for the company to hold off any CEO pay rise until performance improves. So you may want to check if insiders are buying Vertu Motors shares with their own money (free access).
If you want to buy a stock that is better than Vertu Motors, 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.
