This article will reflect on the compensation paid to Gavin Rochussen who has served as CEO of Polar Capital Holdings plc (LON:POLR) since 2017. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Polar Capital Holdings.
View our latest analysis for Polar Capital Holdings
Comparing Polar Capital Holdings plc's CEO Compensation With the industry
Our data indicates that Polar Capital Holdings plc has a market capitalization of UK£590m, and total annual CEO compensation was reported as UK£745k for the year to March 2020. Notably, that's a decrease of 23% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at UK£350k.
On comparing similar companies from the same industry with market caps ranging from UK£300m to UK£1.2b, we found that the median CEO total compensation was UK£846k. So it looks like Polar Capital Holdings compensates Gavin Rochussen in line with the median for the industry. What's more, Gavin Rochussen holds UK£8.8m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | UK£350k | UK£350k | 47% |
| Other | UK£395k | UK£615k | 53% |
| Total Compensation | UK£745k | UK£965k | 100% |
Speaking on an industry level, nearly 49% of total compensation represents salary, while the remainder of 51% is other remuneration. Polar Capital Holdings is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Polar Capital Holdings plc's Growth
Polar Capital Holdings plc's earnings per share (EPS) grew 29% per year over the last three years. It saw its revenue drop 11% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 Polar Capital Holdings plc Been A Good Investment?
Most shareholders would probably be pleased with Polar Capital Holdings plc for providing a total return of 53% over three years. 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.
In Summary...
As previously discussed, Gavin is compensated close to the median for companies of its size, and which belong to the same industry. Investors would surely be happy to see that returns have been great, and that EPS is up. Although the pay is close to the industry median, overall performance is excellent, so we don't think the CEO is paid too generously. Also, such solid returns might lead to shareholders warming to the idea of a bump in pay.
If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Polar Capital Holdings.
Important note: Polar Capital 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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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.
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About AIM:POLR
Polar Capital Holdings
Polar Capital Holdings plc is a publicly owned investment manager.
Flawless balance sheet with solid track record and pays a dividend.
