Shareholders May Not Be So Generous With QinetiQ Group plc's (LON:QQ.) CEO Compensation And Here's Why

Key Insights

• QinetiQ Group to hold its Annual General Meeting on 17th of July
• CEO Steve Wadey's total compensation includes salary of UK£719.0k
• The overall pay is 136% above the industry average
• Over the past three years, QinetiQ Group's EPS fell by 46% and over the past three years, the total shareholder return was 38%

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

The share price of QinetiQ Group plc (LON:QQ.) has increased significantly over the past few years. However, the earnings growth has not kept up with the share price momentum, suggesting that some other factors may be driving the price direction. Some of these issues will occupy shareholders' minds as the AGM rolls around on 17th of July. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

View our latest analysis for QinetiQ Group

How Does Total Compensation For Steve Wadey Compare With Other Companies In The Industry?

At the time of writing, our data shows that QinetiQ Group plc has a market capitalization of UK£2.6b, and reported total annual CEO compensation of UK£1.6m for the year to March 2025. Notably, that's a decrease of 46% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at UK£719k.

On comparing similar companies from the British Aerospace & Defense industry with market caps ranging from UK£1.5b to UK£4.7b, we found that the median CEO total compensation was UK£663k. Hence, we can conclude that Steve Wadey is remunerated higher than the industry median. Moreover, Steve Wadey also holds UK£5.1m worth of QinetiQ Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, roughly 46% of total compensation represents salary and 54% is other remuneration. Our data reveals that QinetiQ Group allocates salary more or less in line with the wider market. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

QinetiQ Group plc's Growth

Over the last three years, QinetiQ Group plc has shrunk its earnings per share by 46% per year. It achieved revenue growth of 1.0% over the last year.

Overall this is not a very positive result for shareholders. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 QinetiQ Group plc Been A Good Investment?

We think that the total shareholder return of 38%, over three years, would leave most QinetiQ 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.

In Summary...

While the return to shareholders does look promising, it's hard to ignore the lack of earnings growth and this makes us question whether these strong returns will continue. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

Whatever your view on compensation, you might want to check if insiders are buying or selling QinetiQ Group shares (free trial).

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.