Is Spirax-Sarco Engineering plc's (LON:SPX) CEO Overpaid Relative To Its Peers?

Nick Anderson has been the CEO of Spirax-Sarco Engineering plc (LON:SPX) since 2014. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!

View our latest analysis for Spirax-Sarco Engineering

How Does Nick Anderson's Compensation Compare With Similar Sized Companies?

Our data indicates that Spirax-Sarco Engineering plc is worth UK£6.3b, and total annual CEO compensation is UK£2.3m. (This is based on the year to December 2018). That's just a smallish increase of 6.9% on last year. We think total compensation is more important but we note that the CEO salary is lower, at UK£543k. When we examined a selection of companies with market caps ranging from UK£3.1b to UK£9.4b, we found the median CEO total compensation was UK£2.7m.

So Nick Anderson is paid around the average of the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

You can see, below, how CEO compensation at Spirax-Sarco Engineering has changed over time.

Is Spirax-Sarco Engineering plc Growing?

Spirax-Sarco Engineering plc has increased its earnings per share (EPS) by an average of 27% a year, over the last three years (using a line of best fit). Its revenue is up 15% over last year.

This demonstrates that the company has been improving recently. A good result. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. It could be important to check this free visual depiction of what analysts expect for the future.

Has Spirax-Sarco Engineering plc Been A Good Investment?

Most shareholders would probably be pleased with Spirax-Sarco Engineering plc for providing a total return of 159% 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.

In Summary...

Nick Anderson is paid around the same as most CEOs of similar size companies.

Shareholders would surely be happy to see that shareholder returns have been great, and the earnings per share are up. So one could argue the CEO compensation is quite modest, if you consider company performance! Shareholders may want to check for free if Spirax-Sarco Engineering insiders are buying or selling shares.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.