Stock Analysis

How Much Is Ultra Electronics Holdings plc (LON:ULE) CEO Getting Paid?

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LSE:ULE
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Simon Pryce has been the CEO of Ultra Electronics Holdings plc (LON:ULE) since 2018, and this article will examine the executive's compensation with respect to the overall performance of the company. 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 Ultra Electronics Holdings

How Does Total Compensation For Simon Pryce Compare With Other Companies In The Industry?

According to our data, Ultra Electronics Holdings plc has a market capitalization of UK£1.5b, and paid its CEO total annual compensation worth UK£1.6m over the year to December 2019. That's a notable increase of 50% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at UK£665k.

On examining similar-sized companies in the industry with market capitalizations between UK£750m and UK£2.4b, we discovered that the median CEO total compensation of that group was UK£3.0m. This suggests that Simon Pryce is paid below the industry median. Moreover, Simon Pryce also holds UK£759k worth of Ultra Electronics Holdings stock directly under their own name.

Component20192018Proportion (2019)
Salary UK£665k UK£358k 42%
Other UK£927k UK£702k 58%
Total CompensationUK£1.6m UK£1.1m100%

Talking in terms of the industry, salary represented approximately 42% of total compensation out of all the companies we analyzed, while other remuneration made up 58% of the pie. Our data reveals that Ultra Electronics Holdings allocates salary more or less in line with the wider market. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
LSE:ULE CEO Compensation December 3rd 2020

A Look at Ultra Electronics Holdings plc's Growth Numbers

Ultra Electronics Holdings plc has seen its earnings per share (EPS) increase by 5.4% a year over the past three years. In the last year, its revenue is up 6.0%.

We're not particularly impressed by the revenue growth, but the modest improvement in EPS is good. So there are some positives here, but not enough to earn high praise. 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 Ultra Electronics Holdings plc Been A Good Investment?

Boasting a total shareholder return of 82% over three years, Ultra Electronics Holdings plc has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

As we touched on above, Ultra Electronics Holdings plc is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, shareholder returns are rock solid over the past three years, and that’s undoubtedly a good sign. Considering this fine result for investors, we believe CEO compensation to be apt.

If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Ultra Electronics Holdings.

Important note: Ultra Electronics Holdings 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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