We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Chemring Group PLC's (LON:CHG) CEO For Now

Key Insights

• Chemring Group to hold its Annual General Meeting on 15th of March
• Salary of UK£514.0k is part of CEO Mick Ord's total remuneration
• The total compensation is 2,069% higher than the average for the industry
• Chemring Group's total shareholder return over the past three years was 35% while its EPS grew by 27% over the past three years

Under the guidance of CEO Mick Ord, Chemring Group PLC (LON:CHG) has performed reasonably well recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 15th of March. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for Chemring Group

Comparing Chemring Group PLC's CEO Compensation With The Industry

At the time of writing, our data shows that Chemring Group PLC has a market capitalization of UK£804m, and reported total annual CEO compensation of UK£2.3m for the year to October 2022. That's a notable decrease of 35% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at UK£514k.

On comparing similar companies from the British Aerospace & Defense industry with market caps ranging from UK£338m to UK£1.4b, we found that the median CEO total compensation was UK£108k. Accordingly, our analysis reveals that Chemring Group PLC pays Mick Ord north of the industry median. Furthermore, Mick Ord directly owns UK£1.6m worth of shares in the company.

Component	2022	2021	Proportion (2022)
Salary	UK£514k	UK£476k	22%
Other	UK£1.8m	UK£3.1m	78%
Total Compensation	UK£2.3m	UK£3.6m	100%

Talking in terms of the industry, salary represented approximately 36% of total compensation out of all the companies we analyzed, while other remuneration made up 64% of the pie. Chemring Group pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Chemring Group PLC's Growth

Over the past three years, Chemring Group PLC has seen its earnings per share (EPS) grow by 27% per year. In the last year, its revenue is up 13%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Chemring Group PLC Been A Good Investment?

Most shareholders would probably be pleased with Chemring Group PLC for providing a total return of 35% 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...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 2 warning signs for Chemring Group that investors should be aware of in a dynamic business environment.

Switching gears from Chemring Group, 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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.