How Much is Liontrust Asset Management's (LON:LIO) CEO Getting Paid?

This article will reflect on the compensation paid to John Ions who has served as CEO of Liontrust Asset Management PLC (LON:LIO) since 2010. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Liontrust Asset Management.

View 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£766m, and reported total annual CEO compensation of UK£4.6m for the year to March 2020. That's just a smallish increase of 3.1% on last 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£285m and UK£1.1b, we discovered that the median CEO total compensation of that group was UK£776k. Accordingly, our analysis reveals that Liontrust Asset Management PLC pays John Ions north of the industry median. What's more, John Ions holds UK£9.5m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 49% of total compensation represents salary, while the remainder of 51% is other remuneration. Liontrust Asset Management sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Liontrust Asset Management PLC's Growth Numbers

Over the past three years, Liontrust Asset Management PLC has seen its earnings per share (EPS) grow by 7.3% per year. In the last year, its revenue is up 40%.

It's great to see that revenue growth is strong. Combined with modest EPS growth, we get a good impression of the company. We'd stop short of saying the business performance is amazing, but there are enough positives to justify further research, or even adding the stock to your watch-list. 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 Liontrust Asset Management PLC Been A Good Investment?

Boasting a total shareholder return of 148% over three years, Liontrust Asset Management PLC has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

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, shareholder returns for the last three years have been excellent. That's why we were hoping EPS growth would match this growth, but sadly that is not the case. All things considered, we don't think there's a reason to criticize CEO compensation, though we hope Liontrust Asset Management will post healthier EPS growth moving forward.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. 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.

Important note: Liontrust Asset Management 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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