Paul Scott became the CEO of Renew Holdings plc (LON:RNWH) in 2016, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Renew Holdings.
See our latest analysis for Renew Holdings
How Does Total Compensation For Paul Scott Compare With Other Companies In The Industry?
At the time of writing, our data shows that Renew Holdings plc has a market capitalization of UK£425m, and reported total annual CEO compensation of UK£833k for the year to September 2020. That's a modest increase of 4.5% on the prior year. While we always look at total compensation first, our analysis shows that the salary component is less, at UK£292k.
For comparison, other companies in the same industry with market capitalizations ranging between UK£144m and UK£578m had a median total CEO compensation of UK£657k. So it looks like Renew Holdings compensates Paul Scott in line with the median for the industry. Moreover, Paul Scott also holds UK£532k worth of Renew Holdings stock directly under their own name.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | UK£292k | UK£300k | 35% |
| Other | UK£541k | UK£497k | 65% |
| Total Compensation | UK£833k | UK£797k | 100% |
Talking in terms of the industry, salary represented approximately 63% of total compensation out of all the companies we analyzed, while other remuneration made up 37% of the pie. In Renew Holdings' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Renew Holdings plc's Growth Numbers
Over the past three years, Renew Holdings plc has seen its earnings per share (EPS) grow by 11% per year. In the last year, its revenue is up 3.4%.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Renew Holdings plc Been A Good Investment?
Boasting a total shareholder return of 39% over three years, Renew Holdings 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.
To Conclude...
As previously discussed, Paul is compensated close to the median for companies of its size, and which belong to the same industry. Investors would surely be happy to see that returns have been great, and that EPS is up. So one could argue that CEO compensation is quite modest, if you consider company performance! Also, such solid returns might lead to shareholders warming to the idea of a bump in pay.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 1 warning sign for Renew Holdings that investors should look into moving forward.
Switching gears from Renew Holdings, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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About AIM:RNWH
Adequate balance sheet and fair value.
