Does Games Workshop Group PLC's (LON:GAW) CEO Pay Reflect Performance?

Kevin Rountree became the CEO of Games Workshop Group PLC (LON:GAW) in 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Games Workshop Group

How Does Kevin Rountree's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Games Workshop Group PLC has a market cap of UK£1.9b, and reported total annual CEO compensation of UK£1.1m for the year to June 2019. We think total compensation is more important but we note that the CEO salary is lower, at UK£551k. We looked at a group of companies with market capitalizations from UK£1.5b to UK£4.9b, and the median CEO total compensation was UK£1.7m.

This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.

The graphic below shows how CEO compensation at Games Workshop Group has changed from year to year.

Is Games Workshop Group PLC Growing?

Games Workshop Group PLC has increased its earnings per share (EPS) by an average of 45% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 16%.

This demonstrates that the company has been improving recently. A good result. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. You might want to check this free visual report on analyst forecasts for future earnings.

Has Games Workshop Group PLC Been A Good Investment?

Most shareholders would probably be pleased with Games Workshop Group PLC for providing a total return of 1021% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

It looks like Games Workshop Group PLC pays its CEO less than similar sized companies.

Considering the underlying business is growing earnings, this would suggest the pay is modest. And given most shareholders are probably very happy with recent returns, you might even think that Kevin Rountree deserves a raise! Most shareholders like to see a modestly paid CEO combined with strong performance by the company. The cherry on top would be if company insiders are buying shares with their own money. So you may want to check if insiders are buying Games Workshop Group shares with their own money (free access).

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

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.

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