Senior plc (LON:SNR) has not performed well recently and CEO David Squires will probably need to up their game. At the upcoming AGM on 23 April 2021, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. The data we present below explains why we think CEO compensation is not consistent with recent performance.
Comparing Senior plc's CEO Compensation With the industry
Our data indicates that Senior plc has a market capitalization of UK£495m, and total annual CEO compensation was reported as UK£917k for the year to December 2020. Notably, that's a decrease of 24% over the year before. We note that the salary of UK£513.0k makes up a sizeable portion of the total compensation received by the CEO.
For comparison, other companies in the same industry with market capitalizations ranging between UK£289m and UK£1.2b had a median total CEO compensation of UK£813k. So it looks like Senior compensates David Squires in line with the median for the industry. What's more, David Squires holds UK£537k worth of shares in the company in their own name.
On an industry level, roughly 48% of total compensation represents salary and 52% is other remuneration. It's interesting to note that Senior pays out a greater portion of remuneration through salary, compared to the industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
A Look at Senior plc's Growth Numbers
Over the last three years, Senior plc has shrunk its earnings per share by 105% per year. Its revenue is down 34% over the previous year.
The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Senior plc Been A Good Investment?
The return of -58% over three years would not have pleased Senior plc shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.
Whatever your view on compensation, you might want to check if insiders are buying or selling Senior shares (free trial).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
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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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