Andrew Croft has been the CEO of St. James's Place plc (LON:STJ) since 2018, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for St. James's Place.
Comparing St. James's Place plc's CEO Compensation With the industry
At the time of writing, our data shows that St. James's Place plc has a market capitalization of UK£6.1b, and reported total annual CEO compensation of UK£1.6m for the year to December 2019. That's a notable decrease of 18% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at UK£549k.
For comparison, other companies in the same industry with market capitalizations ranging between UK£3.0b and UK£8.9b had a median total CEO compensation of UK£3.6m. That is to say, Andrew Croft is paid under the industry median. Furthermore, Andrew Croft directly owns UK£8.3m worth of shares in the company, implying that they are deeply invested in the company's success.
On an industry level, roughly 49% of total compensation represents salary and 51% is other remuneration. It's interesting to note that St. James's Place allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at St. James's Place plc's Growth Numbers
St. James's Place plc has seen its earnings per share (EPS) increase by 29% a year over the past three years. It saw its revenue drop 87% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has St. James's Place plc Been A Good Investment?
St. James's Place plc has not done too badly by shareholders, with a total return of 3.7%, over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
As we noted earlier, St. James's Place pays its CEO lower than the norm for similar-sized companies belonging to the same industry. At the same time, EPS growth has been exceptional over the past three years. Unfortunately, although shareholder returns are growing, they haven't impressed us as much in comparison, over the same period. We would wish for better returns (whether dividends or capital gains) but we do admire the solidEPS growth on show here. So considering these factors, we think Andrew is modestly compensated.
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 1 warning sign for St. James's Place 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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