Anthony Michael Coombs became the CEO of S&U plc (LON:SUS) in 1999, 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 S&U
Comparing S&U plc's CEO Compensation With the industry
According to our data, S&U plc has a market capitalization of UK£264m, and paid its CEO total annual compensation worth UK£427k over the year to January 2020. We note that's an increase of 10% above last year. In particular, the salary of UK£355.0k, makes up a huge portion of the total compensation being paid to the CEO.
On comparing similar companies from the same industry with market caps ranging from UK£146m to UK£586m, we found that the median CEO total compensation was UK£427k. From this we gather that Anthony Michael Coombs is paid around the median for CEOs in the industry. Moreover, Anthony Michael Coombs also holds UK£29m worth of S&U stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
| Component | 2020 | 2018 | Proportion (2020) |
| Salary | UK£355k | UK£340k | 83% |
| Other | UK£72k | UK£47k | 17% |
| Total Compensation | UK£427k | UK£387k | 100% |
Talking in terms of the industry, salary represented approximately 83% of total compensation out of all the companies we analyzed, while other remuneration made up 17% of the pie. There isn't a significant difference between S&U and the broader market, in terms of salary allocation in the overall compensation package. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at S&U plc's Growth Numbers
S&U plc has reduced its earnings per share by 4.2% a year over the last three years. Its revenue is up 7.7% over the last year.
Overall this is not a very positive result for shareholders. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has S&U plc Been A Good Investment?
S&U plc has served shareholders reasonably well, with a total return of 13% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
To Conclude...
As previously discussed, Anthony Michael is compensated close to the median for companies of its size, and which belong to the same industry. According to our analysis, S&U is suffering from uninspiring EPS growth, and even though shareholder returns are stable, they are hardly impressive. These figures do not go well against CEO compensation, which is more or less equal to the industry median. We wouldn't go as far as saying CEO compensation is inappropriate, but we don't think the executive is underpaid.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for S&U that you should be aware of before investing.
Important note: S&U 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 LSE:SUS
S&U
Provides motor, property bridging, and specialist finance services in the United Kingdom.
Good value with reasonable growth potential and pays a dividend.
