Our Take On QinetiQ Group's (LON:QQ.) CEO Salary

Steve Wadey became the CEO of QinetiQ Group plc (LON:QQ.) in 2015, 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 evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for QinetiQ Group

Comparing QinetiQ Group plc's CEO Compensation With the industry

Our data indicates that QinetiQ Group plc has a market capitalization of UK£1.7b, and total annual CEO compensation was reported as UK£2.0m for the year to March 2020. Notably, that's a decrease of 15% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at UK£610k.

For comparison, other companies in the same industry with market capitalizations ranging between UK£713m and UK£2.3b had a median total CEO compensation of UK£1.6m. From this we gather that Steve Wadey is paid around the median for CEOs in the industry. Furthermore, Steve Wadey directly owns UK£1.6m worth of shares in the company.

Speaking on an industry level, nearly 42% of total compensation represents salary, while the remainder of 58% is other remuneration. It's interesting to note that QinetiQ Group allocates a smaller portion of compensation to salary 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.

QinetiQ Group plc's Growth

QinetiQ Group plc has reduced its earnings per share by 5.0% a year over the last three years. In the last year, its revenue is up 22%.

Investors would be a bit wary of companies that have lower EPS But on the other hand, revenue growth is strong, suggesting a brighter future. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has QinetiQ Group plc Been A Good Investment?

Most shareholders would probably be pleased with QinetiQ Group plc for providing a total return of 57% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

As we noted earlier, QinetiQ Group pays its CEO in line with similar-sized companies belonging to the same industry. The company has logged solid shareholder returns for the past three years. Meanwhile, revenues have been increasing recently On a sour note, EPS growth has been negative. Overall, the company's performance hasn't been that disappointing for us to object the CEO compensation.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for QinetiQ Group that you should be aware of before investing.

Switching gears from QinetiQ 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. 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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