Shareholders Would Not Be Objecting To Kier Group plc's (LON:KIE) CEO Compensation And Here's Why

Key Insights

• Kier Group will host its Annual General Meeting on 16th of November
• Salary of UK£750.0k is part of CEO Andrew O. Davies's total remuneration
• The total compensation is similar to the average for the industry
• Kier Group's EPS grew by 121% over the past three years while total shareholder return over the past three years was 107%

We have been pretty impressed with the performance at Kier Group plc (LON:KIE) recently and CEO Andrew O. Davies deserves a mention for their role in it. Coming up to the next AGM on 16th of November, shareholders would be keeping this in mind. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.

View our latest analysis for Kier Group

How Does Total Compensation For Andrew O. Davies Compare With Other Companies In The Industry?

At the time of writing, our data shows that Kier Group plc has a market capitalization of UK£465m, and reported total annual CEO compensation of UK£2.2m for the year to June 2023. That's mostly flat as compared to the prior year's compensation. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at UK£750k.

In comparison with other companies in the British Construction industry with market capitalizations ranging from UK£163m to UK£652m, the reported median CEO total compensation was UK£1.9m. This suggests that Kier Group remunerates its CEO largely in line with the industry average. Moreover, Andrew O. Davies also holds UK£1.2m worth of Kier Group stock directly under their own name.

Component	2023	2022	Proportion (2023)
Salary	UK£750k	UK£750k	35%
Other	UK£1.4m	UK£1.4m	65%
Total Compensation	UK£2.2m	UK£2.1m	100%

Speaking on an industry level, nearly 37% of total compensation represents salary, while the remainder of 63% is other remuneration. Our data reveals that Kier Group allocates salary more or less in line with the wider market. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Kier Group plc's Growth Numbers

Over the past three years, Kier Group plc has seen its earnings per share (EPS) grow by 121% per year. It achieved revenue growth of 7.5% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. 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 Kier Group plc Been A Good Investment?

Most shareholders would probably be pleased with Kier Group plc for providing a total return of 107% over three years. 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.

To Conclude...

Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 1 warning sign for Kier Group that investors should look into moving forward.

Important note: Kier Group is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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.