It Looks Like The Rank Group Plc's (LON:RNK) CEO May Expect Their Salary To Be Put Under The Microscope

Shareholders will probably not be too impressed with the underwhelming results at The Rank Group Plc (LON:RNK) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 14 October 2021. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. We present the case why we think CEO compensation is out of sync with company performance.

Check out our latest analysis for Rank Group

Comparing The Rank Group Plc's CEO Compensation With the industry

According to our data, The Rank Group Plc has a market capitalization of UK£746m, and paid its CEO total annual compensation worth UK£747k over the year to June 2021. We note that's an increase of 35% above last year. In particular, the salary of UK£486.5k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between UK£293m and UK£1.2b had a median total CEO compensation of UK£445k. Hence, we can conclude that John O'Reilly is remunerated higher than the industry median. Moreover, John O'Reilly also holds UK£481k worth of Rank Group stock directly under their own name.

Component	2021	2020	Proportion (2021)
Salary	UK£487k	UK£475k	65%
Other	UK£260k	UK£77k	35%
Total Compensation	UK£747k	UK£552k	100%

Talking in terms of the industry, salary represented approximately 81% of total compensation out of all the companies we analyzed, while other remuneration made up 19% of the pie. Rank Group sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at The Rank Group Plc's Growth Numbers

Over the last three years, The Rank Group Plc has shrunk its earnings per share by 98% per year. In the last year, its revenue is down 48%.

Overall this is not a very positive result for shareholders. 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. 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 The Rank Group Plc Been A Good Investment?

Since shareholders would have lost about 0.8% over three years, some The Rank Group Plc investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for Rank Group that you should be aware of before investing.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.

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