Want to participate in a short research study? Help shape the future of investing tools and receive a $20 prize!
Kenny Alexander became the CEO of GVC Holdings PLC (LON:GVC) in 2007. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Kenny Alexander’s Compensation Compare With Similar Sized Companies?
According to our data, GVC Holdings PLC has a market capitalization of UK£3.7b, and pays its CEO total annual compensation worth UK£21m. (This figure is for the year to December 2017). While we always look at total compensation first, we note that the salary component is less, at UK£838k. When we examined a selection of companies with market caps ranging from €3.5b to €11b, we found the median CEO compensation was €2.9m.
It would therefore appear that GVC Holdings PLC pays Kenny Alexander 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 better assess whether the pay is overly generous by looking into the underlying business performance.
You can see a visual representation of the CEO compensation at GVC Holdings, below.
Is GVC Holdings PLC Growing?
GVC Holdings PLC has reduced its earnings per share by an average of 22% a year, over the last three years (measured with a line of best fit). Its revenue is up 126% over last year.
The reduction in earnings per share, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for earnings growth. In conclusion we can’t form a strong opinion about business performance yet; but it’s one worth watching. You might want to check this free visual report on analyst forecasts for future earnings.
Has GVC Holdings PLC Been A Good Investment?
Most shareholders would probably be pleased with GVC Holdings PLC for providing a total return of 51% 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.
We examined the amount GVC Holdings PLC pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
Over the last three years returns to investors have been great, though we might have liked stronger business growth. As a result of the juicy return to investors, the CEO remuneration may well be quite reasonable. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling GVC Holdings (free visualization of insider trades).
Important note: GVC Holdings may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE 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 email@example.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.