Does Liontrust Asset Management's (LON:LIO) CEO Salary Compare Well With Industry Peers?

John Ions became the CEO of Liontrust Asset Management PLC (LON:LIO) in 2010, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Liontrust Asset Management

How Does Total Compensation For John Ions Compare With Other Companies In The Industry?

At the time of writing, our data shows that Liontrust Asset Management PLC has a market capitalization of UK£814m, and reported total annual CEO compensation of UK£4.6m for the year to March 2020. That's a modest increase of 3.1% on the prior year. We think total compensation is more important but our data shows that the CEO salary is lower, at UK£348k.

On examining similar-sized companies in the industry with market capitalizations between UK£302m and UK£1.2b, we discovered that the median CEO total compensation of that group was UK£904k. Accordingly, our analysis reveals that Liontrust Asset Management PLC pays John Ions north of the industry median. What's more, John Ions holds UK£10m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Talking in terms of the industry, salary represented approximately 49% of total compensation out of all the companies we analyzed, while other remuneration made up 51% of the pie. Liontrust Asset Management pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Liontrust Asset Management PLC's Growth Numbers

Liontrust Asset Management PLC has seen its earnings per share (EPS) increase by 18% a year over the past three years. In the last year, its revenue is up 27%.

Shareholders would be glad to know that the company has improved itself over the last few years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Liontrust Asset Management PLC Been A Good Investment?

Boasting a total shareholder return of 193% over three years, Liontrust Asset Management PLC has done well by shareholders. 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 we noted earlier, Liontrust Asset Management pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Importantly though, EPS growth and shareholder returns are very impressive over the last three years. So, in acknowledgment of the overall excellent performance, we believe CEO compensation is appropriate. Given the strong history of shareholder returns, the shareholders are probably very happy with John's performance.

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 5 warning signs for Liontrust Asset Management that investors should think about before committing capital to this stock.

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.

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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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