Stock Analysis

What Can We Learn About PageGroup's (LON:PAGE) CEO Compensation?

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LSE:PAGE
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Steve Ingham has been the CEO of PageGroup plc (LON:PAGE) since 2006, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for PageGroup.

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Comparing PageGroup plc's CEO Compensation With the industry

According to our data, PageGroup plc has a market capitalization of UK£1.4b, and paid its CEO total annual compensation worth UK£4.1m over the year to December 2019. That's a slight decrease of 4.6% on the prior year. We think total compensation is more important but our data shows that the CEO salary is lower, at UK£630k.

On examining similar-sized companies in the industry with market capitalizations between UK£749m and UK£2.4b, we discovered that the median CEO total compensation of that group was UK£1.4m. Accordingly, our analysis reveals that PageGroup plc pays Steve Ingham north of the industry median. Furthermore, Steve Ingham directly owns UK£4.2m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20192018Proportion (2019)
Salary UK£630k UK£616k 15%
Other UK£3.5m UK£3.7m 85%
Total CompensationUK£4.1m UK£4.3m100%

Speaking on an industry level, nearly 77% of total compensation represents salary, while the remainder of 23% is other remuneration. In PageGroup's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
LSE:PAGE CEO Compensation November 25th 2020

A Look at PageGroup plc's Growth Numbers

Over the last three years, PageGroup plc has shrunk its earnings per share by 16% per year. In the last year, its revenue is down 8.1%.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation 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 PageGroup plc Been A Good Investment?

PageGroup plc has not done too badly by shareholders, with a total return of 3.9%, over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

As we noted earlier, PageGroup pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Unfortunately, EPS has not grown in three years, failing to impress us. And while shareholder returns have been respectable, they have hardly been superb. So you can understand why we do not think CEO compensation is particularly modest!

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for PageGroup that investors should be aware of in a dynamic business environment.

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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