This article will reflect on the compensation paid to Michael Ord who has served as CEO of Chemring Group PLC (LON:CHG) since 2018. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Chemring Group.
Comparing Chemring Group PLC's CEO Compensation With the industry
According to our data, Chemring Group PLC has a market capitalization of UK£825m, and paid its CEO total annual compensation worth UK£1.0m over the year to October 2020. That is, the compensation was roughly the same as last year. We think total compensation is more important but our data shows that the CEO salary is lower, at UK£440k.
In comparison with other companies in the industry with market capitalizations ranging from UK£293m to UK£1.2b, the reported median CEO total compensation was UK£996k. This suggests that Chemring Group remunerates its CEO largely in line with the industry average. Furthermore, Michael Ord directly owns UK£146k worth of shares in the company.
Talking in terms of the industry, salary represented approximately 42% of total compensation out of all the companies we analyzed, while other remuneration made up 58% of the pie. Although there is a difference in how total compensation is set, Chemring Group more or less reflects the market in terms of setting the salary. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Chemring Group PLC's Growth
Chemring Group PLC has seen its earnings per share (EPS) increase by 93% a year over the past three years. In the last year, its revenue is up 20%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Chemring Group PLC Been A Good Investment?
We think that the total shareholder return of 65%, over three years, would leave most Chemring Group PLC shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
As we touched on above, Chemring Group PLC is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. The company is growing EPS and total shareholder returns have been pleasing. 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.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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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