John Douglas has been the CEO of RPS Group plc (LON:RPS) since 2017. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
Check out our latest analysis for RPS Group
How Does John Douglas's Compensation Compare With Similar Sized Companies?
Our data indicates that RPS Group plc is worth UK£115m, and total annual CEO compensation was reported as UK£912k for the year to December 2019. That's a modest increase of 2.7% on the prior year year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at UK£508k. We took a group of companies with market capitalizations below UK£160m, and calculated the median CEO total compensation to be UK£272k.
Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where RPS Group stands. On a sector level, around 61% of total compensation represents salary and 39% is other remuneration. So it seems like there isn't a significant difference between RPS Group and the broader market, in terms of salary allocation in the overall compensation package.
It would therefore appear that RPS Group plc pays John Douglas more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business. You can see, below, how CEO compensation at RPS Group has changed over time.
Is RPS Group plc Growing?
RPS Group plc has reduced its earnings per share by an average of 12% a year, over the last three years (measured with a line of best fit). Its revenue is down 3.9% over last year.
Unfortunately, earnings per share have trended lower over the last three years. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.
Has RPS Group plc Been A Good Investment?
Given the total loss of 78% over three years, many shareholders in RPS Group plc are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary...
We compared total CEO remuneration at RPS Group plc with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.
Earnings per share have not grown in three years, and the revenue growth fails to impress us. Just as bad, share price gains for investors have failed to materialize, over the same period. Some might well form the view that the CEO is paid too generously! Shifting gears from CEO pay for a second, we've spotted 3 warning signs for RPS Group you should be aware of, and 1 of them is a bit concerning.
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. Thank you for reading.